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Coverdell Education Savings Account

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Start saving  for tomorrow today!

A Coverdell Education Savings Account (ESA) is a tax-advantaged account designed to help save for educational expenses.
 
Coverdell ESA offers tax-free earnings growth and tax-free withdrawals when the funds are spent on qualified expenses. Coverdell ESAs aren't just for college – you can also use your savings to pay for K-12 expenses tax-free, and they can offer more investment options and lower fees than 529 plans.
Anyone can set up a Coverdell Education Savings Account. The account is opened in the child's name. The designated beneficiary must be an individual under the age of 18. The age 18 limitation does not apply to any designated beneficiary with special needs.
$2,000 per beneficiary.
Contribution may be limited depending on your modified adjusted gross income (MAGI).
No “catch-up” contributions.
Coverdell ESAs for the taxable year can be opened and funded anytime between the first day of the contributor’s tax year and the date of the contributor’s tax return is due for the year, excluding extensions. This due date is normally April 15 of the following year.
Allowed.
Earnings grow tax-free for children under the age of 30. Withdrawals are tax-free for qualified education expenses.
No deduction for contributions. Tax-free growth replaces this benefit.
 
None if: For payment of qualified education expenses.
Standard Bank Early Withdrawal Penalties Apply.
Must be completed 30 days after reaching age 30 or upon death. The age 30 limit does not apply to any beneficiary with special needs.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Refer to Providence Bank’s Truth in Savings Disclosure for additional account information. Please ask a Personal Banker for current rate information. Information for this chart was obtained from the IRS website. Where language is unclear, assumptions have been made. Investors must consult with their tax advisor or legal counsel for advice and information concerning their particular situation. Representatives of this bank may not give legal or tax advice.