Education Savings Accounts

Invest in your child’s education.

Education Savings Accounts are designed to help you pay for your child’s education, from elementary education to college.

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Save for your child’s education—from elementary expenses to college tuition

A Coverdell Education Savings Account (ESA), formerly known as an Education IRA, is a special account designed to help pay for your child’s education. With a Cornerstone Fund ESA, you can enjoy the benefit of fixed income investment products like term notes, while still enjoying the tax advantages of an ESA. Withdrawals from an ESA are free from federal taxes so long as you use the money to pay for qualified education expenses, which typically include tuition, books, supplies, uniforms, room and board, and computer equipment. Tax-free withdrawals apply not only to college expenses, but also to elementary and secondary education expenses, no matter whether the schools are public or private.

The difference between the Cornerstone Fund ESA and a 529 plan

The Cornerstone ESA gives you more investment flexibility, since you can use the withdrawals tax-free for education expenses from kindergarten, all the way through college. However, there’s an income eligibility limit ($110,000 for single filers and $220,000 for joint filers) and a relatively low limit on contributions ($2,000 per year) to ESAs, unlike 529 plans.

The good news is that your child can be the beneficiary of both a 529 plan and ESA, and you can contribute to both accounts in the same year. We strongly encourage consultation with an independent financial advisor when considering your educational savings plan options and subsequent allocations.

Frequently Asked Questions

What is the minimum opening investment requirement?

A Cornerstone Fund ESA can be opened for as little as $500.


How much interest does the account earn?

Cornerstone Fund ESAs earn competitive* interest. Check out our current rates, and we encourage you to compare them to other financial institutions.


What are the monthly service charges?

There are no monthly service charges with Cornerstone Fund ESAs.


Are withdrawals tax-free?

Yes, as long as the withdrawals are used for education expenses, which apply to not only college expenses, but also elementary and secondary education expenses.