Coverdell Education Savings Accounts (Coverdell ESA)
Choosing the right college can be difficult. Saving for college can be simple with the right investment program.
Whether you’re saving for your child’s, your grandchild’s or another relative’s education, a Coverdell Education Savings Account (ESA) from Scottrade is a convenient, tax-free way to save for his or her future.
The Coverdell ESA is similar in nature to a Roth IRA, which is a retirement saving product. If you meet the income eligibility requirements, you may contribute up to $2,000 (after-tax) annually into an investment trust account designated for your beneficiary until he or she turns 18. Once the child enters a qualified educational institution, the money may be withdrawn (tax–free) to pay for tuition, fees, books, room and board, or other qualified expenses.
There are no setup, annual or termination fees associated with a Coverdell ESA. To learn more about this product or to open a new ESA account, please contact your local Scottrade broker today or Apply Online.
Coverdell ESA Features
- Contribute up to $2,000 per child per year
- Eligibility varies depending on the income level of the contributor
- Nondeductible contributions
- Tax-deferred earnings
- Distributions are typically tax-free
- Withdrawals may be used for K-12 expenses as well as college
- Beneficiary may have more than one account in his or her name
- Account may be withdrawn until the beneficiary reaches age 30
