Define: Coverdell Education Savings Account

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Definition: Coverdell Education Savings Account



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Full Definition of Coverdell Education Savings Account


Formerly called the education IRA, the Coverdell education savings account is an investment plan used for funding a child’s college education. The maximum amount one may contribute to a Coverdell education savings account changes over time, and there are several rules one must follow to avoid penalties. For example, any funds in the Coverdell education savings account must be distributed to the beneficiary before his/her thirtieth birthday. The Coverdell education savings account is modelled after the traditional individual retirement account, or IRA. Although contributions to a Coverdell education savings account are not tax-deductible, earnings on it are, provided that they are used to pay for qualified education expenses. IRS Publication 970 offers more information on the Coverdell education savings account.


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Definition Sources


Definitions for Coverdell Education Savings Account are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 4th February, 2020