Education Savings Account

How it works:

For each beneficiary, you can open an account with as little as $100. A beneficiary can receive up to $2,000 total in contributions in after-tax dollars annually. The earnings on your contributions grow tax-free, and when it comes time to use the funds you've saved up, you can do so without having to pay any additional taxes. 

Acceptable uses:

A Coverdell Education Savings Account (CESA) can be used for elementary, secondary and post-secondary "qualified education expenses." These expenses include tuition, room & board, tutoring, uniforms, other school fees, books & supplies, computers and internet access.

Other details:

You can change the beneficiary of the account. A contribution must be made before the beneficiary turns 18, unless the beneficiary is a special-needs beneficiary. You can also rollover any unused ESA funds, without penalty, to other family members under the age of 30 or a special-needs beneficiary.

Fees you should know about:

• $0 maintenance fee
• $0 paper statement fee
• $5 Excess Withdrawal Activity fee¹

¹ Fee assessed for each withdrawal or transfer occurrence that exceeds the six (6) allowable transaction occurrences per calendar month or statement cycle including, but not limited to: Bill Payments, Telephone Transfers, ACH Payments, Checks (not allowed for savings accounts), Drafts, and Point-of-Sale Transactions. ATM and In-Branch Withdrawals are unlimited.

Who can use the savings:

The account can be opened by a parent or guardian, and contributions can come from parents, grandparents, relatives, friends or family members. Contributor-adjusted gross income must be under the limit set for a given tax year to be eligible—see us for details on the current year's limits. The beneficiary of the account must use the funds before they turn 30, unless they are a special-needs beneficiary.

Additional documents: 

• Personal Rules and Regulations
• Other possible fees