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Coverdell ESA

Invest in Your Child's Future


Planning for your child's education is one of the most important investments you can make. Whether it's tuition for private school or college expenses down the road, a Coverdell Education Savings Account (ESA) from ACCESS Credit Union helps set your child up with a bright future.

A Coverdell ESA allows you to make nondeductible contributions on behalf of a child each year until the child reaches age 18*. The earnings generated on the ESA contributions remain tax-deferred while held in the ESA. Then when a child uses ESA assets to pay for qualified education expenses, the contributions and the earnings are distributed tax-free.

Coverdell Education Savings Account Bristol

Coverdell ESA Benefits

Start your Coverdell ESA today with ACCESS Credit Union! Contribute up to $2,000* per year per child, and enjoy peace of mind knowing you're helping your child succeed with fewer financial roadblocks.


What Can a Coverdell ESA Be Used For?
Unlike traditional savings, a Coverdell ESA is specifically designed for education-related expenses for elementary, secondary, and post-secondary, including:

  • Tuition and Fees
  • Books
  • Supplies and equipment
  • Room and board
  • Special needs services

How to Open a Coverdell ESA Account with ACCESS Credit Union:

  • Speak with one of our financial advisors.
  • Open the account under your child’s name as the designated beneficiary.
  • Ensure your child is under 18 during the year of contribution.
  • Confirm your Modified Adjusted Gross Income (MAGI) to determine contribution eligibility.
  • Begin making cash contributions up to $2,000 per year per child.




    • ESA vs. 529 Plan: Why a Coverdell May Be Right for You

    While 529 plans are beneficial for larger, long-term education savings and can even be used for student loan repayment, they come with restrictions.

    A Coverdell ESA youth account offers greater flexibility. It allows you to use funds for a broader range of qualified educational expenses that a 529 plan doesn't always cover, including tutoring, school supplies, and transportation.

    Commonly Asked Questions

    You can use ESA funds up until the beneficiary turns 30 years old. If funds remain at that point, you have a couple of options:

    • Transfer the account to another eligible family member under age 30
    • Roll over the balance into a 529 plan to continue saving for education
    If no action is taken and the beneficiary turns 30, the remaining earnings (appreciation) will be subject to income tax and a 10% penalty. So plan accordingly with an advisor to make sure funds are being applied appropriately.

    Anyone – family members or non-family members can contribute to a child’s ESA, as long as their modified adjusted gross income falls below or within the income limits for the year.

    No, a Coverdell ESA cannot be used for student loan repayment. It can only be applied to qualified, current educational expenses, such as tuition, supplies, and equipment, while the beneficiary is actively enrolled in an eligible school program.

    *Annual contributions of up to $2,000 are allowed for joint filers with a modified adjusted gross income (MAGI) of $190,000 or less (phased out between $190,000 and $220,000), and for single filers with a MAGI of $95,000 or less (phased out between $95,000 and $110,000); those with MAGI above these ranges are ineligible to contribute.