Education Savings Account
Ideal as a supplement to a 529 plan, an education savings account (ESA) helps you pay for education expenses from kindergarten through college, and withdrawals are tax-free when used for eligible expenses.
What are the fees and commissions?
- $0 account open or maintenance fees. Other account fees, fund expenses, and brokerage commissions may apply.1
- Minimum required to open an account: $1,0002
- Commissions: $8.95 per online trade;3 $0 per Schwab ETF online trade in your Schwab account4
What are the benefits of an education savings account?
Every Schwab account comes with investment help and guidance. With this account:
- Account earnings can grow tax-deferred.
- Withdrawals are tax-free when used for qualified education expenses.5
- Contributions can be made to an ESA and a 529 plan for the same beneficiary in the same year.
1. See the Schwab 529 College Savings Plan Guide and Participation Agreement for comprehensive details on fees and expenses.
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2. The $1,000 minimum required to open an account is waived if you set up an automatic monthly transfer of $100 through direct deposit or Schwab MoneyLink.
3. Restrictions apply: The $8.95 commission does not apply to foreign stock transactions, large block trading transactions requiring special handling, or restricted stock transactions. All broker-assisted and automated phone trades are subject to service charges. See the Charles Schwab Pricing Guide for details. Employee equity compensation transactions are subject to separate commission schedules.
4. Restrictions apply: Online trades of Schwab ETFs™ are commission-free at Charles Schwab & Co., Inc. (member SIPC), while trades of third-party ETFs are subject to commissions. Broker-assisted and automated phone trades are subject to service charges. A minimum deposit of $1,000 is required to open most Schwab brokerage accounts. Waivers may apply. See the Charles Schwab Pricing Guide for details. All ETFs are subject to management fees and expenses.
5. Qualified education expenses can include tuition, fees, books, supplies, equipment, room, board. There are state and federal early withdrawal penalties if funds are not used for qualified expenses for 529 plans and Coverdell accounts types.Schwab ETFs are distributed by SEI Investments Distribution Co. (SIDCO). SIDCO is not affiliated with Charles Schwab & Co., Inc.
Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges, and expenses. You can request a prospectus by calling 800-435-4000. Please read the prospectus carefully before investing.
Investment returns will fluctuate and are subject to market volatility, so that an investor's shares, when redeemed or sold, may be worth more or less than their original cost. Unlike mutual funds, shares of ETFs are not individually redeemable directly with the ETF.
This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified tax advisor, CPA, Financial Planner or Investment Manager.