What are the investment options for a Coverdell Education Savings Account?

What are the investment options for a Coverdell Education Savings Account?

You can invest in a variety of options within a Coverdell Education Savings Account, including stocks, bonds, mutual funds, and ETFs.

Are there any restrictions on the types of investments I can make?

Yes, while you have a lot of flexibility, the investments must be made in qualified education expenses, and certain types of investments like collectibles are not allowed.

What is the maximum contribution limit for a Coverdell account?

The maximum contribution limit is $2,000 per beneficiary per year, and contributions are subject to income limits.

Can I use the funds for K-12 expenses?

Yes, Coverdell accounts can be used for qualified K-12 expenses, including tuition, fees, and even some educational supplies.

What happens if I don't use all the funds by the time my child reaches college?

If there are remaining funds, you can transfer them to another family member's Coverdell account or withdraw them, but taxes and penalties may apply.