Accounts & Products

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?

Service fees: $0¹
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.

Ready to get started?

Download Application

Need help? Call
866-663-5247.

Account fees and commissions

There is no fee to open or maintain an Education Savings Account at Schwab.

Minimum opening deposit: $1,000 (waived with automatic $100 monthly deposits)²
Monthly service charge: $0
Online equity trades: Just $8.95,³ regardless of your account balance, how often you trade, or how many shares you trade

Want more pricing details?

Review all our account fees and minimums.

Quick answers to related questions

Have questions about our Education Savings Account? Here are responses to some of the most common questions we hear. If you have a question about your specific situation that is not answered here, please call us at 866-663-5247.

How do I open this account?

It's quick and easy to open an Education Savings Account. Download an Education Savings Account application or request an Education Savings Account application by mail. Or, you can always call 866-663-5247 for assistance.

When can I access my account?

We'll send you your account number as soon as your application is completed and approved. You can use your account number to log in to Schwab.com and manage your account.

Who manages the account?

You manage the account until it is transferred to your child. To avoid penalties and taxes and preserve the tax-advantaged status, the account must be liquidated when your child is 30 years old or transferred to a qualified family member.

What is the contribution limit for this account?

Contributions are limited to $2,000 per year until the beneficiary’s 18th birthday. Contributions are not tax-deductible, and income limits apply that may reduce this amount.

Are there withdrawal penalties for this account?

Withdrawals of earnings for nonqualified expenses may be subject to a 10% federal penalty and are considered taxable income. Contributions over the legal maximum of $2,000 are subject to an additional 6% tax for each year the excess remains in the account.

Can a beneficiary have more than one ESA?

Schwab will only set up a single ESA for each beneficiary. Your child may have other education savings accounts at other companies, but total contributions to all ESAs are limited to the $2,000 annual limit.

What if I open an ESA, but my child decides not to go to college?

If the beneficiary of an ESA decides not to go to college or doesn't need all of the funds, the ESA may be transferred to another member of the beneficiary’s family.

Can I roll over funds from a Traditional or Roth IRA into an ESA?

No. Rollovers into an ESA are not allowed.

Applying for an Education Savings Account is easy.

It's helpful to have the following information on hand before you begin:

Your Social Security number
Your driver's license number
Your employer's name and address (if applicable)
Statement information for funds you may want to transfer

Take the next step.

Open an Education Savings Account today.

Download Application or call 866-663-5247.

Request an Education Savings Account application by mail.
See all Schwab accounts.

1. There are no fees to open or maintain your account. Other fees may apply; please see pricing details.

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.