Alabama Central Credit Union logo

Coverdell ESA

WE COULD TELL YOU HOW PASSIONATE WE ARE ABOUT HELPING OUR MEMBERS, BUT WE’D RATHER JUST SHOW YOU. ESTABLISH YOUR MEMBERSHIP

  • Education Savings: Set aside funds specifically for your child's educational expenses.
  • Tax-Free Growth: Dividends grow tax-free, and withdrawals are tax-free and penalty-free when used for qualified education expenses.1
  • Beneficiary Requirements: The designated beneficiary must be under 18 when contributions are made.
  • Contribution Limits: Contribute up to $2,000 annually per child, with certain income limits applying.
  • Withdrawal Age: Funds must be withdrawn by the time the beneficiary turns 30.
  • Family Transfers: Transfer the ESA to another family member without penalty if needed.
  • No Deductible Contributions: Contributions are not tax-deductible.
  • Minimum Deposit: Open a Coverdell ESA with a minimum deposit of $500.

Additional Notes:

1. Qualified expenses include tuition, fees, books, supplies, and board.

2. Consult a tax advisor to determine your contribution limit.

3. Earnings are subject to income tax and a 10% penalty if not used for qualified expenses.

See our account fees and disclosures (PDF).