Series 6: 3.6.2. Coverdell Education Savings Accounts

3.6.2.  Coverdell Education Savings Accounts

The Coverdell Education Savings Account (CESA or Coverdell ESA) was previously known as the Education IRA. The Coverdell ESA is similar to a 529 college savings plan in that contributions are made with cash in after-tax dollars and all withdrawals can be made tax-free as long as they are used for qualified educational expenses.

There are also differences between Coverdell and 529 accounts. First, annual contributions are limited to $2,000 in total across all Coverdell accounts for a