Coverdell Education Savings Account (ESA)
Need a way to help pay for educational expenses? Set up a Coverdell education savings account to help pay for the qualified educational expenses of your designated beneficiary.
Unlike many state-sponsored Section 529 plans (also called qualified tuition programs), an ESA allows you to save for your child’s or another student’s qualified elementary, secondary, and higher education expenses at most public, private, and parochial schools.
The contributions you make to an ESA are never tax-deductible. But your earnings do accumulate tax-deferred and withdrawals used to pay for qualified education expenses are tax-free.
In addition, contributions you make to an ESA are independent of and don’t affect the contributions you can otherwise make to a traditional or Roth IRA.