Where to open a Coverdell Account?

[Joseph]

So I have to admit that I thought the income limitation prevented me from being able to open an account for my children, but according to WCI's latest monthly newsletter it is possible to open as a "backdoor" in the name of the kid.

I went to Vanguard and they have a notice that they are no longer accepting new accounts.

Fidelity says on their site that they are not offering ESAs.

Anyone here opened one lately?  TDAmeritrade looks like the next stop.

[I am interested because WCI noted that the fees are lower than 529 plans and I have kids going to private school.]

And --trivia fact-- my research shows these are technically IRS code 530. I am going to go with that name from now on.

 

[DoubleMDs]

Am looking into this a well for our niece. So far TD Ameritrade looks to have the best options. Let me know if you find anything different.

[deeppizza]

I actually just went through this with my 2 children.  I opened accounts for both of them, one through Primecap Odyssey Funds, and the other through Mairs and Power.  I know that you can open one up through Schwab as well.

[Joseph]

Thank you for the additional names, @deeppizza

Any reason why you picked different places for the two children?

Do you see lower fees than 529s?

 

[deeppizza]

I already own shares in Primecap Odyssey Growth and Mairs & Powers Growth in my taxable account; No real specific reason why I didn't choose one for both children other than that I felt that both are are good funds to hold for a long period of time, and have performed well.

In terms of fees, both of these funds have ER of 0.6.  We already have 529s for both kids through UESP (Utah), and we contribute to the maximum limit of the available tax deduction from our state ($16K total - so $8K/child/year).  The funds we have for both children through the 529 are Vanguard Index funds and DFA funds with ER ranging from 0.02 to 0.5.

The main reason why I choose to open ESAs in addition to 529s was the fact that we can use the ESA money for educational uses prior to college, something you're restricted to with 529s.

[Joseph]

Perfect. Thanks a lot for the info!