A Coverdell Education Savings Account is a convenient way to save for your child's education. Any earnings are tax exempt as long as the funds are used to pay for educational expenses, and you can choose from a variety of investment options.

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Eligibility

Individuals whose income falls within or below the following phase-out ranges can contribute to a Coverdell Education Savings Account.

Single filers with Modified Adjusted Gross Income (MAGI) between $95,000 and $110,000
Couples filing jointly with MAGI between $190,000 and $220,000

Contributions

Coverdell Education Savings Accounts have specific contribution guidelines.

Maximum of $2,000 per year per child under age 18
Contributions may be made past the age of 18 for children who are qualified special needs beneficiaries

Taxes

Contributions to Coverdell Education Savings Accounts are not tax deductible.

Earnings are tax exempt.
Distributions are tax free if used for qualified educational expenses.

Withdrawals

Funds from Coverdell Education Savings Accounts can be used for qualified educational institutions and expenses.

Qualified Withdrawals

Tuition
Room and board
Mandatory fees
Books
Supplies
Uniforms
Computer-related equipment

Withdrawal Limits

Student must be enrolled full- or part-time at a public, private or religious primary or secondary school
Funds must be distributed by the student’s 30^th birthday unless the designated beneficiary is a special-needs individual

Options

Investment options for your Coverdell Education Savings Account include:

Money Rate Savings Account
18-Month Variable CD
Fixed Rate CD
Monthly Saver

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Resources

Calculators What will it take to save for a college education? What is the value of higher education? What investments can I use to save for college? See All Investment Tools & Calculators

Articles College Savings Options Paying for College

Videos College Savings (2:17)

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The information provided should not be considered as tax or legal advice. Please consult with your tax advisor and/or attorney regarding your individual circumstances.

INVESTMENT PRODUCTS OFFERED THROUGH BB&T INVESTMENT SERVICES, INC. ARE: NOT A DEPOSIT • NOT FDIC-INSURED • NOT GUARANTEED BY THE BANK • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • MAY GO DOWN IN VALUE

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Only deposit products are FDIC insured.

Penalty may result from early withdrawal.

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