Terms of Use

Money invested will compound tax-free and remain untaxed upon withdrawal.

If the money is not withdrawn by the time the beneficiary turns 30, it must be distributed to the beneficiary, who will then pay a 10% penalty on the distribution.

One exception is that the proceeds can be transferred from the original beneficiary's account to another family member's Coverdell Education Savings Account to be used for postsecondary education.