Education Savings Accounts (ESAs)
Every dollar counts when it comes to your child’s education. Save smarter with a Coverdell ESA that earns you higher dividends and tax-free withdrawals.
Get StartedSave smarter with a tax-advantaged account
Contributions are not tax deductible, but earnings grow tax-deferred
Withdrawals are tax-free when the funds are spent on qualified education expenses
Funds can be used for elementary, secondary and higher education
Almost anyone can make contributions, up to a total of $2,000 per year for each child
No maintenance or administration fees
Start Saving for College
See If an ESA Is Right For You
Talk to a VyStar representative to find out if a Coverdell ESA will meet your needs.
Open Your Account
Give us a call or visit a branch to get started. If you’re not already a VyStar member, we can sign you up.
Start Saving
Almost anyone can contribute to an ESA, up to a total of $2,000 per year for each child.
Build Your Savings
Consistent investments over a number of years can be an effective strategy to accumulate wealth. Even small additions to your savings add up over time. This calculator demonstrates how to put this savings strategy to work for you.
Education Savings Account FAQs
What are the tax benefits of an ESA?
ESA contributions are not tax deductible, but the earnings grow tax-deferred. Withdrawals are tax-free for the child (also known as the beneficiary) when the money is spent on qualified education expenses. However, keep in mind that any money that isn’t spent on qualified education expenses may be subject to income tax as well as additional penalties.
What is a qualified education expense?
A qualified education expense is any money paid for expenses that are required to attend an eligible educational institution, such as tuition, fees, books and supplies. Visit our Service Center to learn more about what kinds of expenses qualify.
Who can contribute to an ESA?
Almost anyone can contribute to an ESA. Each child can receive up to the maximum contribution amount allowed per year (currently $2,000) from all sources. It does not matter if this is done in a single account or in multiple accounts designed to benefit the same child. However, high-income contributors may be limited in how much they can contribute to an ESA. Visit our Service Center to learn more about contributions.
What if the child can’t use all the money in the ESA?
If the original child, or beneficiary, has completed their education and there is still money left in the account, then the person responsible for the account can designate a new beneficiary. The only requirement is that the new beneficiary must be a qualified family member. Visit our Service Center to learn more about changing the beneficiary for an ESA.
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