What can I use the funds in my 530 Coverdell account for?

The purpose of a 530 Coverdell is primarily to save money for your student to attend college. However, should you need to use these funds you are still required to follow ESA guidelines. Any funds used from your 530 account must be used on approved expenses only. Please review our Fund Use guidelines!

My financial institution will not accept funds directly off of my ESA debit card. However I found a third party that will accept the funds and allow me to transfer the funds to my financial institution. Would this be approved?

No. Funds must go directly to the designated financial institution of your choice.  Cash advances, cashier’s checks/ money orders, or 3rd party entities such as PayPal, cannot be used to transfer funds at this time.

Does it matter which parent is the holder of the account?

The holder of the ESA account (parent who signed the contract) must be at least a signatory on the account.

After I set up a 530 Coverdell account what do I need to show ESA?

Whenever you transfer funds into your 530 account, this must be reflected on your expense report for the appropriate quarter. In addition, at every 4th Quarter expense report you must submit an account summary showing how much money is still in the account. If money was spent, we will need to see receipts for these purchases to verify that they were approved ESA expenses.

Can I put my entire ESA in a college savings plan?

The maximum allowable contribution is $2,000 per year to your Coverdell account.

I am lost. Can you give me some more resources?

For more general information please visit:


For ideas on how to get started please visit:


What happens if I put more than $2,000 a year?

 If you exceed the $2,000 per year limit, you will be required to refund the difference to the state.  Keep in mind that ESA Policy allows for the removal of participants that exhibit misspending.

What is the submission schedule for placing money in a 530?

Contributions to your 530 Coverdell are limited to $2,000 per year.  For the purposes of 530 Coverdell accounts, the funding year is from April 15th to April 14th.

Are the ESA debit cards restricted for Coverdells?

Cashier’s checks, money orders, cash withdrawals, and 3rd party transfers are prohibited to open a Coverdell 530 Eductaional Savings Plan. 

Most banks will not accept funds directly off of a debit card to be placed in a 530 account. Finding a financial institution that will accept the funds can be a challenge. When contacting your financial institution or financial advisor, please make them aware of this fact so that they can help steer you in the right direction.

What should I do to get one?

Coverdells are available through banks, mutual funds, and some brokerage houses. Many of these options have information numbers that can help answer your questions over the phone.  Please contact a financial institution of your choice to inquire about specific details.