An education savings account (ESA) is a type of investment account that can be used to save a certain amount of money for a child that is under the age of 18 in order to pay for future educational expenses like college tuition. There are limitations on the amount of money that can be contributed into the account, and there are also limits as to who can contribute. The money that is placed into the ESA will gain interest tax-free, and when the conditions are correct, can be withdrawn and used for approved educational costs tax-free as well. Money that is deposited, withdrawn, not used, or used for purposes other than education, however, is generally taxed at the federal rate. It is important to note that ESAs are regulated by the government. The laws that determine different contribution amounts and other rules can, have, and will change from their present state. Currently, the maximum contribution to an ESA is capped at $2000 per year, but this is only temporary and the amount will drop down to $500 in the year 2013. The maximum amount that an individual or household can contribute is also dependent on the gross adjusted income of the contributor, with individuals making over $110,000 per year being ineligible to contribute at all. Once the money is in the account, it can gain interest or grow through investment tax-free. If any money is deposited over the maximum allowed contribution, then the additional money is taxed at the end of the year if it is not withdrawn beforehand. The account can only be opened and contributed to when the beneficiary, the child, is less than 18 years of age. Additionally, the money must be withdrawn and used for education before the child turns 30, although there are some exceptions for children with special needs. Detailed and current information about opening and contributing to an education savings account can be found in literature provided by the Internal Revenue Service (IRS). Many banks, insurance companies, and even certain educational institutions are available that offer to open and host an ESA for a child.