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.
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