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Plan for Their Future

Planning for the costs associated with higher education can make the burden of paying for college easier to bear. One way to do that is to open a Coverdell Education Saving Account (ESA).

Structured much like a Roth IRA, Coverdell ESAs allow you to put aside money now for qualified expenses later while reaping the benefits of tax-free earnings.

Anyone can make deposits, or contributions, to a Coverdell ESA on behalf of the child minor for whom the account is opened, up to $2,000/year. Contributions are made from post-tax earnings, which means that contributions can’t be deducted from your taxable income1.

When you withdraw from a Coverdell ESA for the qualified educational expenses of the minor, any interest withdrawn is tax-free2. All of the funds in a Coverdell ESA must be distributed to the minor by the time they turn 30.

Compare Coverdell ESA Products

Product Minimum Balance Annual Maintenance Fee Withdrawals
Coverdell ESA Savings None $10/plan May be subject to IRS early-withdrawal penalties.
Coverdell ESA CD $1,000 $10/plan May be subject to IRS early-withdrawal penalties and Seattle Credit Union interest penalties.

Ready to get started?

To open a Coverdell ESA, stop by one of our nine convenient branches, call us at 206.398.5500 or toll-free at 800.334.2489, or fill out the form below to get started.

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1Seattle Credit Union is not a tax advisor and does not provide tax advice. Consult a licensed tax professional to determine how your personal tax situation affects your ability to contribute to a Coverdell ESA.

2Distributions may be subject to IRS early-withdrawal penalties. Withdrawals from Coverdell certificates may be subject to Seattle Credit Union early-withdrawal penalties. Penalties may reduce principal.

student cap

Current Rates

Coverdell ESA: 0.70%-2.17% APY*
Student Savings:

*APY Effective as of August 1, 2019. See disclosures for tiers and complete details by clicking on the product name above.

See All Rates

Deposit calculator

Use this calculator to help you plan your savings.

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