ESA

Definition

Coverdell Education Savings Account. An investment vehicle designed to help parents fund their child's education. The Coverdell Education Savings Account has replaced the Education IRA. Contributions to the account are taxed, but earnings used to pay education expenses are not. The account is transferable among family members. However, there are several restrictions attached to this account. The entire account has to be disbursed before the beneficiary's 30th birthday, and any withdrawals after this date or for expenses that do not qualify under the act will be subject to income taxes and a penalty.

Use ESA in a sentence

You may want to try and open up an ESA if you think you can get good profit from it in the long run.

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I really wanted to fund my child's education, so I decided to try to get an esa going that would help us out a lot.

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The ESA was especially helpful for the considerate parents who were planning their children's future since they one year old.

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