Coverdell ESA (Education Savings Account)
A flexible, tax-advantaged way to save for education expenses – K-12, as well as college, graduate school, vocational school, etc. You can contribute up to $2,000 per year for each child?s schooling by establishing a Coverdell Savings Account through State Farm®.
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A Closer Look
- Deposits grow tax free until distributed
- Earnings are tax free as long as they are used for eligible expenses – including supplies, room and board and uniforms, as well as tuition
- Can be used to pay for primary or high school expenses, as well as higher education
- Anyone can contribute up to $2,000 per child each year
- You can either save in a State Farm Bank® Certificate of Deposit (CD) or invest in State Farm Mutual Funds® – the choice is yours
You may contribute up to $2,000 annually to a child's Coverdell Education Savings Account if your modified adjusted gross income (see table below) is less than $95,000 as a single tax filer (or married filing separate) or $190,000 as a married couple filing jointly in the tax year in which you contribute. The $2,000 maximum contribution limit is gradually reduced if your modified adjusted gross income exceeds these limits.
Anyone (including the child for whose benefit the account is established) may contribute to a child's Coverdell ESA, as long as his or her income falls within the income guidelines and the total of all contributions for one beneficiary for the tax year does not exceed the $2,000 limit.
You can save in a Bank FDIC-insured CD or invest in a mutual funds portfolio that can help you keep pace with rising costs and inflation. Your State Farm agent can explain these choices in easy-to-understand terms. Contact an agent
Neither State Farm nor its agents provide investment, tax or legal advice. Consult your investment, tax or legal advisor regarding your personal situation.
Not FDIC Insured
- No Bank Guarantee
- May Lose Value
State Farm Bank®, Bloomington, Illinois, is a Member FDIC and Equal Housing Lender. NMLS ID 139716. The other products offered by affiliate companies of State Farm Bank are not FDIC insured, not a State Farm Bank obligation or guaranteed by State Farm Bank, and subject to investment risk, including possible loss of principal invested. Contact State Farm Bank toll-free at 877-SF4-BANK (877-734-2265). Callers who are hearing or speech impaired should dial 711 or use a preferred Telecommunications Relay Service.