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ESAs (formerly known as Education IRAs) are flexible accounts that allow you to save for a child's qualified educational expenses, including college, private high school tuition, and after-school tutoring. Even relatives and friends can contribute to an ESA for your child.
Contributions are not tax-deductible, but earnings accumulate tax-free, and distributions are tax-free if they are used to meet qualified education expenses. (Please consult your tax advisor for more information on the rules for ESAs.)
ESA certificates require a minimum deposit of $1,000. ESA Share Accounts may be opened with as little as $15, with ongoing contributions added to your account through direct deposit.
Coverdell Education Savings Account (ESA) Rates and Terms
|Account Type||Dividend Rate||APY**||Minimum Balance to Open and Earn Dividend|
|ESA* Share Account||0.05%||0.05%||$15.00|
|6-month ESA Certificate||0.30%||0.30%||$1,000.00|
|12-month ESA Certificate||0.45%||0.45%||$1,000.00|
|18-month ESA Certificate||0.55%||0.55%||$1,000.00|
|24-month ESA Certificate||0.65%||0.65%||$1,000.00|
|36-month ESA Certificate||0.80%||0.80%||$1,000.00|
|48-month ESA Certificate||1.00%||1.00%||$1,000.00|
*ESA is Education Savings Account.
**Annual percentage yield.
Rates may change after the account is open. Fees could reduce the earnings on the account.
There is a substantial penalty for early withdrawals on ESA Certificates.
Rates are effective July 20, 2020. All rates are subject to change without notice.