Coverdell Education Savings Accounts (ESA)
An education savings account is much like an IRA - they allow you to make an annual non-deductible contribution to a specially designated investment trust account. Your account will grow free of federal income taxes, and if all goes well, withdrawals from the account will be completely tax-free as well. You will need to meet certain requirements in the years you wish to make the contributions, and in the years you take withdrawals. But a ESA is an investment vehicle targeted to education expenses, not to retirement.
