Following my 10-part research on educational savings options earlier this year, I'm now ready to open a Coverdell Education Savings Account for my kid. It is a long shot -- Coverdell ESA only allows for up to $2,000 contribution per beneficiary every year, so even with fantastic returns, it is not going to be enough for the bill. I'm mindful I have other savings options, like a 529 Savings Plan. However, with my little son's freshman year still more than a decade down the road, and I am saving a lot anyway, I'm not in a hurry.

Still, to set up a Coverdell Education Savings Account, I need to find a broker. Unfortunately, none of the current brokerage firms I currently use (namely Fidelity, Ameritrade and BrownCo), offers this type of account, so I have to find a new one.

With only $2,000 to contribute every year, I don't intend to do any active trading in the account. At best, I am expecting 1-2 mutual fund trades a year. With this in mind, I am looking for an account that:

1) is charging very little or none for maintenance (even an annual fee of $10 means an expense of 0.5%)
2) is charging very little or none for trading mutual funds ($10 a trade means 0.5% front-load for a $2,000 investment)
3) has a wide selection of inexpensive and quality mutual funds

My first stop is Vanguard. Vanguard has my mindshare of its collection of low-fee funds, so I should have no problem finding a good fund -- free trading of Vanguard funds will be a plus too. The good: Vanguard does offer education savings account. The bad: it charges a $10 per year per fund "Account Maintenance Fee" for funds with a balance of less than $5,000. In addition, it is unclear to me whether my boy's little account will also be subject to the low balance fee ($10 per year per fund for funds with less than $2,500 in balance) and/or index fund maintenance fee ($10 per year per fund for funds with less than $10,000 in balance.

Second stop is E*Trade. E*Trade offers Coverdell account too. There is no minimal, and annual fee is waived if one opts for online confirmation and statements, which is not a problem for me. It has a long list of no-load, no-transaction-fee funds, which should essentially cover my needs of a low-fee fund. One extra bonus is its 12b-1 fee rebate program. The 12b-1 rebate probably only amounts to less than $10 for a $2,000 initial investment, so it is not a big incentive for me.

Scottrade is worth mentioning too for people who are interested in Coverdell ESAs. It, too, charges no annual fee or maintenance fee for Coverdell accounts, and it has a no-load, no-transaction-fee fund list too (almost as long as the E*Trade list). The Scottrade advantage: it lists very high in J. D. Power's ratings of online brokers.

I guess I will need to decide between E*Trade and Scottrade. Who has some experience with either broker?