Almost everyone is eligible
As long as you have reached the age of majority where you are a resident, you can open a plan account. There are no income limits. And there are no limits on who you can open the account for (the person referred to as the account beneficiary). You can open the account for a child, grandchild, friend, spouse -even yourself!
An account may be owned by one person only, and there can be only one beneficiary per account. However, two or more people can open accounts for the same beneficiary. You can contribute to the plan even if you have other education savings accounts (such as a Coverdell Education Savings Account). Note that a non-profit, 501(c)(3) organization may also establish an account to fund scholarships.
Others can help
Relatives and friends can contribute. Once you have opened the account, anyone can make a contribution in amounts of $25 or more. Contributions can be made any time - until the accounts for the same beneficiary reach a total of $260,000 in value.
You can open an account for anyone
Although you may name only one person as account beneficiary, that person can be almost anyone. You may choose a family member or a person not related, a child or adult - as long as the person is a US citizen or permanent resident.
If you change the beneficiary to any other member of the original beneficiary's family, there is no federal penalty or federal income tax consequence.1
If you change the beneficiary to a person outside the original beneficiary's family, the IRS imposes a 10% penalty. (There is no penalty if the beneficiary receives a scholarship to the extent the amount withdrawn does not exceed the scholarship amount, dies, becomes disabled and cannot pursue higher education, attends certain types of institutions such as a military academy to the extent the distribution does not exceed the costs of attendance, or if a Hope Scholarship Credit and/or Lifetime Learning Credit covers payment of the beneficiary's education costs.)
It is easy to get started
District of Columbia Residents2
If you are a District of Columbia resident, just enroll online or complete the Participation Agreement and return it along with your check. Or, talk with your financial advisor about your interest in opening an account and send the application to him or her.
National Participants
If you live outside the District of Columbia, contact your financial advisor. If you do not have an advisor, visit Calvert's Advisor FinderTM Service to locate a qualified advisor near you.
The minimum initial investment is:
- $15 if you contribute through payroll deduction with your employer,
- $25 if you have money automatically contributed from a bank account,or
- $100 if you send a check.
Once the account is open, you can make subsequent contributions of $25 or more until the accounts for the same beneficiary reach a total of $260,000.
