Coverdell Education Savings Account

Coverdell Education Savings Account or ESA for short has an advantage when US savings bonds are concerned. This section of US savings bonds information website discusses Coverdell Education savings accounts and US savings bonds.

What is a Coverdell Education Savings Account?

A Coverdell Education Savings Account (“ESA”) is an account created exclusively for the purpose of paying the qualified education expenses of a child who is designated as the beneficiary of the ESA.

For whom may a Coverdell Education Savings Account be established?

A Coverdell education savings account ESA may be established for the benefit of any child under age 18.

Contributions to the Coverdell education savings account ESA will not be accepted after the child reaches his/her 18th birthday.

This age limit does not apply to special needs students. A Coverdell education savings account ESA may also be established for a family member of an Coverdell education savings account ESA beneficiary to receive a rollover or transfer of the beneficiary’s Coverdell education savings account ESA.

The family member must be under age 30 unless the transfer is due to the beneficiary’ s death, divorce or a court-ordered separation.

This age limit does not apply if the family member is a special needs student.

When may contributions to a Coverdell Education Savings Account ESA begin?

Starting in 2002, Coverdell Education Savings Account ESA contributions for a year may be made any time from the first day of the year until the due date (without extensions) of the contributor’s federal income tax return for the year.