Coverdell Educational Savings Account (ESA)
If you're looking to invest in your kid's education and future, a Coverdell ESA is the right place to start. This type of account offers tax-free growth and withdrawals when money is spent on education expenses. So, when the time comes, your student can focus on hitting the books and you can breathe easy knowing you already have a savings in place.
- Start with as little as $50
- Invest up to $2,000 per year
- Great way to prepare for educational expenses
- The longer it sits, the bigger the reward
Coverdell Educational Share Accounts
MINIMUM INITIAL DEPOSIT: $50
MIN. TO EARN DIVIDEND | ANNUAL PERCENTAGE YIELD | COMPOUNDING PERIOD |
$100 | 0.08% | Monthly |
$5,000 | 0.09% | Monthly |
$20,000 | 0.10% | Monthly |
$50,000 | 0.12% | Monthly |
*A penalty will be assessed for early withdrawal
All rates are subject to change without notice. For the most up-to-date rates, please call or text us at 800.877.4444. The Annual Percentage Yield (APY) stated for all accounts is accurate as of the date listed. Annual Percentage Yield assumes deposits, and dividends paid, are held to maturity. Penalties may be applied for early withdrawal on term accounts. Fees could reduce actual earnings. Refer to “Terms and Conditions” for other account information.
Information accurate as of November 1, 2024.
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Learn MoreCoverdell Educational Share Accounts
MINIMUM INITIAL DEPOSIT: $50
MIN. TO EARN DIVIDEND | ANNUAL PERCENTAGE YIELD | COMPOUNDING PERIOD |
$100 | 0.08% | Monthly |
$5,000 | 0.09% | Monthly |
$20,000 | 0.10% | Monthly |
$50,000 | 0.12% | Monthly |
*A penalty will be assessed for early withdrawal
All rates are subject to change without notice. For the most up-to-date rates, please call or text us at 800.877.4444. The Annual Percentage Yield (APY) stated for all accounts is accurate as of the date listed. Annual Percentage Yield assumes deposits, and dividends paid, are held to maturity. Penalties may be applied for early withdrawal on term accounts. Fees could reduce actual earnings. Refer to “Terms and Conditions” for other account information.
Information accurate as of November 1, 2024.
Frequently Asked Questions
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What can a Coverdell ESA be used for?
- This type of account should be used for higher education expenses, as well as some K-12 expenses.
- Eligibility may include tuition and fees, books, supplies, and equipment that are required for enrollment.
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Can I open an ESA as a standalone account?
You must have a Shares Regular Savings Account for the ESA with a minimum opening deposit of $5 in the Shares Regular in addition to the $50 opening deposit for the ESA.
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What is the annual deadline to contribute?
You have until the due date for filing your federal income tax return for the year to contribute to an ESA (generally April 15).
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Who is in charge of the ESA?
Every ESA must have a “responsible individual” who oversees the account, directs the investments within the account, decides when to withdraw the money, and decides if and when to transfer or roll over the assets to another eligible family member’s ESA. Generally, the responsible individual is the child’s parent or legal guardian. The child may serve as the responsible individual after becoming an adult.
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When can ESA assets be withdrawn?
Money can be withdrawn from a child’s ESA at any time, without restriction, and is tax-free if used for qualified education expenses.
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What happens to the ESA if a child doesn’t use the money?
If a child does not use their ESA money before they turn 30,* the unused portion can be transferred or rolled over to another eligible family member’s ESA. Any money remaining in the ESA when the child turns 30 will be distributed and taxable to the child.
*Age limit does not apply to special needs individuals.
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Can I open an ESA before my child is born?
In order to open the ESA account, we must have the child’s social security number.
See our Terms and Conditions