About Tom Adams Expertise I can answer questions about US Savings Bonds - current value, current interest rates, how to get them redeemed, what to do if they are lost or stolen, how to buy them online, etc...
Experience Experience in the area I am the author of the best-selling book about Savings Bonds,
Savings Bond Advisor.
Expert: Tom Adams Date: 11/29/2007 Subject: Bonds as Educational Investment
Question We just had our first grandchild four months ago. Christmas is coming and we would like to start a bond buying program for her. As I read more I get more confused. EE or I...which would be the best inventment for a child's future eductional expenses.
Thank you,
Cheri
Answer Hi Linda - the best way to save for a child's education expenses is a Qualified State Tuition Plan (QSTP), not savings bonds. I'm not an expert in that area, but you can find out more about them here:
Savings Bonds do have a college education deduction, but it has many limits, among them that the bonds have to be owned by the person on whose return the student is a dependent - typically the parents, not the grandparents.
Or you can make the grandchild the bond owner under the assumption that the child's tax rate will be near 0 during college anyhow.
You can read more about the limitations of the Savings Bond deduction here:
