When it comes to tuition, every penny counts. A Coverdell Education Savings Account is ideal for parents starting early to set aside money for multiple children with hopes to attend college.

Unlike a 529 Plan, a Coverdell ESA isn't just for higher education costs. Tax-free withdrawals can be made for certain elementary, secondary, or vocational school expenses too.

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How it works

  • Open one with as little as $100.
  • Make after-tax annual contributions up to $2,000 until your child turns 18.
  • Set up automatic contributions and increase amounts at any time.
  • Use a Coverdell alone or in addition to other college savings.
  • Watch your savings grow tax-deferred.1
  • Make tax-free withdrawals as long as you use the money for qualified education expenses.
  • Make withdrawals until the beneficiary reaches age 30.

How to qualify

  • Be a parent, family member, or legal guardian of a student under age 18.
  • Earn less than $95,000 if single and $190,000 if married filing jointly to contribute the full amount.
  • Earn $95,000 - $110,000 if single and $190,000 - $220,000 if married filing jointly to make partial contributions.
  • No contributions allowed for income over $110,000 if single or $220,000 if married filing jointly.
  • Some allowances may apply for parents of special needs children.

Saving for college can be intimidating, especially if you're worried you have to save the full amount of tuition, but it doesn't have to be. Our licensed financial advisors can help you devise a plan you can afford.



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  1. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.