A father and young son sitting on floor counting piggy bank money that will be used for an education savings account.

Coverdell Education Savings Accounts

Start saving for your child's future today so they can make tax-free withdrawals for qualified education expenses.

Request CESA Information

Advantages of a Coverdell Education Savings Account (CESA)

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    Tax-Free Withdrawals

    Your child pays no taxes if they use the funds to pay for qualified education expenses by age 30.

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    Flexible Qualifying Expenses

    Pay for tuition, fees, books, and supplies at K-12 and vocational schools, colleges, and more.

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    Whole Family Can Contribute

    You don’t need to work to contribute, so students and retired grandparents can help save.

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    Contribute Up To $2,000 Per Year

    Start saving while your child is little, and your contributions plus earnings will stack up.

Jeanne D’Arc Credit Union Coverdell Education Savings Account

  • Best for members who:

    Best for members who:

  • Employment status

    Employment status

  • Contribution limits

    Contribution limits

  • Tax deductible contributions

    Tax deductible contributions

  • Tax on withdrawals

    Tax on withdrawals

  • Dividend Rate

    Dividend Rate

  • APY*


  • CESA CD Terms

    CESA CD Terms

  • CESA CD Fixed Rates

    CESA CD Fixed Rates

  • Best for members who:

    Want to save for a child's future education

  • Employment status

    Do not need to be employed to contribute

  • Contribution limits

    $2,000 per year per child who must be under 18 at time of opening

  • Tax deductible contributions

    Not tax deductible

  • Tax on withdrawals

    Tax-free if used to pay for qualified education expenses

  • Dividend Rate


  • APY*


  • CESA CD Terms

    6 months to 60 months

  • CESA CD Fixed Rates

    See Certificates of Deposit Rates to learn CESA CD rates

Key details about Coverdell Savings Accounts

Coverdell Education Savings Accounts (CESA) make it easy for parents, other family members, and students to save money for future education expenses.

  • A CESA is also known as a Coverdell IRA.
  • The maximum contribution per child (age 18 or younger) per tax year is $2,000.
  • Contributions are not tax deductible and don’t need to be from earned income.
  • If the person making contributions does have earned income, it must be within IRS limits.
  • Gross income limits are $110,000 for an individual and $220,000 for a joint return.
  • Withdrawals are tax-free if used to pay for qualified education expenses.
  • Qualified expenses include tuition, fees, books, supplies, equipment, and sometimes room and board.
  • All funds must be distributed to the designated beneficiary by age 30.
  • The age limit may not apply if the beneficiary has special needs.

You can use a CESA to save for qualified expenses at  eligible K-12 schools (including public, private, or religious schools) as well as college, university, vocational schools, or other postsecondary educational institutions.

Request CESA Information
A happy student benefits from a Coverdell Education Savings Account.

More benefits of opening a Coverdell Education Savings Account

  • Online and Mobile Banking

    Access your account anytime, anywhere on a phone or another device.

  • Save on Fees

    Watch your child’s education fund grow with no annual fee and no monthly fee.

  • Deposit Insurance

    Deposits are federally insured up to $250,000. Beyond that, deposits are insured by the Massachusetts Share Insurance Corporation (MSIC).

How to open a Coverdell Savings Account

  • Step1
    Check the CESA Criteria

    The beneficiary child must be under age 18 when you open the account, and you need to have plans to use the funds for education.

  • Step2
    Join the Credit Union

    Open a regular savings account with a deposit of just $5, and then you can go ahead and open your CESA.

  • Step3
    Start Contributing to Your CESA

    Parents, family, and the beneficiary child can all contribute up to the $2K annual limit and watch the balance grow!

The Westford Jeanne D’Arc branch is wonderful. Grade A customer service, all employees are so friendly and helpful. 10/10 would recommend!

Molly S.

FAQs about Coverdell Education Savings Accounts (CESA)

A Coverdell Education Savings Account (CESA) used to be known as an Education IRA. It’s a federally sponsored, tax-advantaged trust or custodial account you can set up to pay for your child’s qualified education expenses. The accounts are named in honor of the late Senator Paul Coverdell, who put forward the legislation that created the Education IRA.

You can open a CESA for any student who is under the age of 18. The funds must be withdrawn by the time the student reaches the age of 30. Beneficiaries with special needs may receive contributions beyond the age of 18.

Coverdell Education Savings Accounts (CESAs) were created to help parents and students save for anticipated education expenses.

  • Does not require earned income to contribute; however, if the individual contributing to the Coverdell IRA does have earned income, it must be within IRS Guidelines (refer to IRS Pub.590)
  • Maximum contribution per child (age 18 or younger) per tax year is $2,000.00
  • Contributions are not tax deductible
  • Withdrawals are tax-free if used to pay for qualified education expenses
  • All funds in a Coverdell ESA must be distributed to the designated beneficiary by 30 days after attaining age 30
  • Jeanne D’Arc Credit Union offers IRA Statement Savings Accounts, IRA Money Market Savings Accounts or IRA Certificates of Deposit for your retirement savings


CESAs can be used only to pay for qualified education expenses, such as:

  • Tuition
  • Fees
  • Books
  • Supplies
  • Equipment

In addition, qualified elementary and secondary school expenses include:

  • Academic tutoring
  • Special needs services in the case of a special needs beneficiary
  • Computer technology
  • Internet access for the use of the beneficiary
  • Uniforms
  • Transportation
  • Extended day programs

The cost of room and board may qualify in certain circumstances.

CESA withdrawals can be used to pay for qualified education expenses at:

  • Elementary school
  • Secondary school (K-12)
  • Public, private, or religious schools
  • College
  • University
  • Vocational school

You can also use the funds for other postsecondary educational institutions eligible for the Department of Education student aid program, including most accredited, public, nonprofit, and private postsecondary institutions.

CESA contributions aren’t tax deductible, but funds deposited in the accounts can grow tax-free, and you can make tax-free withdrawals to pay for qualifying education expenses.

If the withdrawals are not used for qualifying expenses, the earnings portion of the withdrawal will be included in the gross income of the beneficiary, and an additional 10 percent tax penalty may apply.

Yes, there’s an annual contribution limit of $2,000 per beneficiary.

There are also limits if you’re contributing from earned income. Individuals can make contributions with a modified adjusted gross income of less than $110,000. If you are a couple filing a joint return, you can contribute from earnings of up to $220,000.

One of the best things about a CESA is that contributions do not need to come from earned income so nearly anyone can contribute to your child’s future:

  • Parents
  • Grandparents
  • Other relatives
  • Friends
  • The child or student for whom the account is being established

Organizations, such as corporations and trusts may also invest in a CESA.

You can get CESA distributions at any time. As long the funds are being used to pay for qualified education expenses for your child (the student or the designated beneficiary), it will generally not be considered taxable income.

You must withdraw all your CESA funds before your child (the student) reaches the age of 30 years. However, special needs beneficiaries are not subject to any age restrictions.

After age 30, any remaining funds will be distributed to the beneficiary, and the earnings portion generally will be considered taxable income of the beneficiary.

To avoid paying taxes on the earnings of unused funds, the funds in a CESA may be rolled over into a CESA for another eligible family member before the primary beneficiary reaches age 30.

More Ways to Save and Invest With Jeanne D’Arc Credit Union

  • Traditional IRA

    Your contributions are tax-deductible, and your earnings can grow tax-free. You then pay regular income tax on withdrawals during retirement.

    Learn More

  • Roth IRA

    Make your contributions from your post-tax earned income. Your earnings grow tax-free, and you can make tax-free withdrawals during retirement.

    Learn More

  • Certificates of Deposit

    With a minimum deposit of just $250, you can earn great rates by putting your cash into a CD account for 6 to 60 months. More secure than the stock markets!

    Learn More


Dividend rate is effective as of October 18, 2022. All rates are subject to change, after account opening, without notice. $5.00 Membership Account required.