Coverdell Education Savings Account (ESA)

A Coverdell Education Savings Account (ESA) is a tax-advantaged savings account designed to help families save for education expenses. Contributions are made with after-tax dollars, but the money grows tax-free, and withdrawals used for qualified educational costs—like tuition, books, and supplies—are also tax-free. This account can be used for K-12 expenses, as well as college. The maximum annual contribution limit is $2,000 per beneficiary, and there are income limits for contributors. It’s a flexible way to save for education while benefiting from tax incentives.