Most banks, brokerage firms, mutual fund house and credit union offer Coverdell Education Savings Account (ESA) and the process of opening an account in these different institutions may vary. The process of opening a Coverdell ESA may involve providing personal information about the beneficiary or the custodian of the account such as name, Social Security number, contact information, date of birth and address, according to the cashmoneylife website.
The Coverdell ESA is another type of investment vehicle where individuals can save up for the education expenses of a beneficiary. This type of savings account may be invested in stocks, bonds and mutual funds to allow it to make non-taxable earnings from the chosen investment, according to the Savingforcollege.com website. The custodian remains in control of the account until the beneficiary reaches the age of 18.
The following is one way of opening a Coverdell Education Savings Account.
- Discuss the matter with a financial adviser
- Choose the institution
- Decide where to invest
It will be a good idea to consult with a financial adviser to understand the Coverdell ESA investment vehicle better before opening an account.
Mutual fund houses and brokerage firms offer better options and charge lower rates compared to banks and credit unions, notes the CashMoneyLife website. However, be sure to learn study all the options to decide where to open an account.
To get the most out of the Coverdell ESA, choose the most ideal investment option that best suit the needs of the beneficiary. Ask about the fees and other features that the institutions offer to go with the account.