Education Accounts (aka Coverdell IRA’s):

Unlike traditional and Roth IRA’s, Coverdell IRA’s are not tools for retirement savings. They are designed solely to help pay higher education expenses.

• Earnings on the funds in a Coverdell IRA will be tax free (if used to pay for higher education expenses before the designated beneficiary reaches age 30)
• Earnings are taxable to the designated beneficiary (not the responsible individual or contributor) if withdrawn for other purposes.
• Encourages a savings program for a child’s education
• Persons such as grandparents, aunts, uncles, or other family members can fund the IRA
• Start-up fee $10.00
• Annual maintenance fee $10.00
• Close Account fee $10.00