You may have heard of 529 accounts, but Coverdell accounts offer a little known way to save for your child's private school.

With a Coverdell, you pop money in that grows tax-free and is spent tax-free on educational expenses for kids in kindergarten through 12th grade. You can contribute up to $2,000 a year once your child is born.

Coverdell money can also be used to pay for college tax-free instead of private school.

Charles Schwab is particularly big in the field of Coverdells. You need $1,000 to open an account and it comes with very low-cost investment fees.

Image of Clark Howard About the author: Clark Howard

Clark Howard is a consumer expert whose goal is to help you keep more of the money you make. His national radio show and website show you ways to put more money in your pocket, with advice you can trust. View More Articles

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