Coverdell Education Savings Account (CESA)
A CESA provides the potential for tax-free investment growth when you use the account to pay for a child’s qualified education expenses. This includes primary, secondary and higher education costs.
A child under age 18 is named as 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the parent or guardian named as the account’s responsible individual controls the account until all of its assets are withdrawn.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.
Maximum annual contribution
You may invest up to $2,000 per child per year
$2,000 per Fund (or $1,000 with a monthly Automatic Investment Plan)
Withdrawals from an Education Savings Account are free from federal income taxes as long as they are used to cover costs associated with qualified education expenses such as tuition, books, fees and supplies.
More detailed information regarding Coverdell Education Savings Accounts is available in our Coverdell Education Savings Account Information Booklet.