Coverdell Education Savings Accounts
It's like a Roth IRA for education
Tax-Advantaged
With an education IRA, earnings and withdrawals for qualified expenses are tax-free.
FDIC Insured
Unlike other investment accounts, your Coverdell ESA is insured by the FDIC.
Flexible Spending
Use your funds for secondary and post-secondary education expenses.
A flexible way to save for anyone's education
Set up an account for any child who is special to you—you're own, a grandchild, niece or nephew, or even a friend.
Contributions and withdrawals
Maximum annual limit
You can contribute $2,000 per child per year until age 18. For beneficiaries with special needs, contributions may be made past the age of 18.
Qualified education expense
Make sure you're withdrawing funds for qualified education expenses, such as tuition, room and board and books. Your withdrawals will be made tax-free.
Distribution timeline
The funds from a Coverdell education savings account (ESA) must be distributed by the beneficiary's 30th birthday.
We want to contribute
We offer a $25 incentive for Your Family First customers.D
Taxes on Coverdell ESAs
Post-tax contributions
Like a Roth IRA, your contributions are made with after-tax dollars. But your earnings still grow tax free.
Unqualified expenses
If you withdraw funds and don't use them for qualified educational expenses, the earnings portion of the withdrawal will be subject to state and federal income tax, as well as an additional 10% penalty.