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Current Rate up to 2.10% APY*

Worried about the high cost of education in the future? A Coverdell Education Savings Account (ESA) is a great way to start saving for your child’s educational future.

  • Peace of mind knowing that your funds are protected from the market swings that affect other accounts
  • No need to worry if you switch jobs – you can make contributions to your Coverdell Savings from your new job

Convenient payroll deduction into your account means you won’t miss the money and you’ll be surprised when you see how much you have saved!

What is a Coverdell Education Savings Account (ESA)?

An ESA may be an easy way to start saving for a child’s education. Contributing to a child’s ESA will help jump-start his or her savings and give them the tax-free money later to pay for college. For more information, click on the digital ESA brochure below.

Coverdell IRA’s

The Taxpayer Relief Act of 1997 created a new kind of savings plan to help you provide funds for the higher education costs of a child. Formerly known as an Education IRA, the name was changed to Coverdell Education Savings Account when improvements to the plan were made by the Economic Growth and Tax Relief Reconciliation Act of 2001. The Coverdell ESA is funded by after-tax contributions and allows for tax-free withdrawals.

Account Features:

  • Six dividend tiers designed to maximize your savings:
Account Balance Nominal Dividend RateAPY
$0.01 – $9,999.991.00%1.00%
$10,000 – $49,999.991.09%1.10%
$50,000 – $99,999.991.19%1.20%
$100,000 – $249,999.991.54%1.55%
$250,000 – $499,9991.83%1.85%
$500,000 and over 2.08%2.10%
  • ESA contributions can be made by payroll deduction, share transfer, or check.
  • Members up to age 18 are eligible to have contributions made on their behalf. This age limit does not apply to special needs beneficiaries. This is a person who requires additional time to complete his/her education because of a physical, mental or emotional condition (including a learning disability).
  • Single filer members with a Modified Adjusted Gross Income (MAGI) up to $95,000 may contribute up to $2,000 per child. Contributions of less than the full amount can be made if MAGI is between $95,000 and $110,000.
  • Joint filer members with MAGI up to $190,000 may contribute up to $2,000 per child. Contributions of less than the full amount can be made if MAGI is between $190,000 and $220,000.
  • Married filing separate with MAGI of $95,000 may contribute $2,000 per child. Contributions of less than the full amount can be made if MAGI is between $95,000 and $110,000.
  • Total contributions per Coverdell ESA cannot exceed $2,000 per year.
  • Contributions are not tax deductible.
  • Withdrawals are tax-free provided they are used for qualified education expenses and can be withdrawn at any time prior to the beneficiary reaching age 30. A portion of the withdrawal may be subject to income tax and a 10% penalty if not used for the intended purpose.
  • Funds may stay in a Coverdell ESA until the beneficiary reaches age 30.
  • Money left in one child’s Coverdell ESA may be rolled over, tax-free to another child’s Coverdell ESA as long as the new beneficiary is a member of the original beneficiary’s family and under age 30.
  • Contributions to traditional or Roth IRAs have no effect on the contribution you can make to each Coverdell ESA.
  • NCUA insured up to $250,000 collectively for all savings products excluding IRAs.

The Coverdell ESA contribution deadline is the same as the Roth and Traditional IRAs; April 15th or the tax deadline for the year of the contribution.

Ready to Get Started? Need Help? Have Questions?

Call our IRA Specialist, Jolynn Stuebner at 800.288.6423, ext. 4053 or contact her via email at

*APY=Annual Percentage Yield. Dividend rate and Annual Percentage Yield (APY) are stated as of 10/1/2023. All rates are subject to change at any time without notice.