The Coverdell Education Savings Account (CESA) offers the potential for tax-free investment growth when you use the account to pay for a child’s qualified education expenses. This includes elementary, secondary, and college costs. You may invest up to $2,000 per child per year in an Education Savings Account.
CESA is available to you if you have a modified adjusted gross income (MAGI) below $220,000 for joint filers, or below $110,000 if you’re single. A child under age 18 is named as the beneficiary on the account, with a parent or legal guardian named as the responsible individual.
Although the account is in the child’s name, the parent or guardian named as the account’s responsible individual controls the account until all of its assets are withdrawn. No contributions may be made after the child turns 18, but the account can remain open until the beneficiary turns 30.
Withdrawals from an Education Savings Account are free from federal income taxes as long as they’re used to cover costs associated with qualified education expenses, such as tuition, books, fees, and supplies.
The minimum investment in an Oak Funds Coverdell Education Savings Account is $2000 (or $1000 with a Systematic Investment Plan.)
Download an Investor Kit