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Coverdell Education Savings Account
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This nondeductible savings account features tax-free withdrawals designed to help fund a child's education. Earnings grow tax-free. First Bank offers a variable rate certificate of deposit for Coverdell Education Savings Accounts (CESA).


  • A Coverdell Education Savings Account (CESA) allows individuals and non-individuals (such as corporations, charities, etc.) to save and pay for higher education expenses for a designated child on a tax-favored basis.
  • You qualify to establish a Coverdell Education Savings Account (CESA) if:
    • You are contributing toward a designated beneficiary under the age of 18 
    • Your Modified Adjusted Gross Income (MAGI) falls below set IRS limits: see chart
  • Contributions are not tax-deductible
  • Each year you may contribute up to $2,000 per year, per child in total contributions
  • Special contribution and distribution waivers are available for children with special needs
  • Contributions are independent of your Traditional and/or Roth contributions
  • You qualify to take tax-free distributions from the Coverdell Education Savings Account (CESA) if:
    • Distributions are used for qualified education expenses including:
      1. Tuition and fees
      2. Books, supplies, and education oriented computer technology & equipment
      3. Cost of room and board limited to the school's posted room and board charge for students living on campus or $2,500 each year for students living off campus and not at home.
  • Distributions are used for the above qualified expenses required for the enrollment or attendance of the child at any eligible educational institution (eligibility is based on ability to participate in a student aid program administered by the Department of Education)
  • Distributions are made during the year in which the educational expense occurred
  • Qualified distributions are coordinated with other non-taxable education benefits and cannot exceed the actual education expenses for the year

Frequently Asked Questions about Coverdell Education Savings Accounts (CESA)
Investment Options for Coverdell Education Savings Accounts (CESA)

To find out more about Coverdell Education Savings Accounts, call or visit the First Bank location nearest you.


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