<p>My D will hopefully be graduating from college next Sping. After scraping by with our savings and taking some stafford and a small Parent Plus loan, I think we see the light at the end of the tunnel. We have some Seriess EE savings bonds, purchased after 1990 that we have accumulated since she was born. We as parents are the owners on most of them and she is the beneficiary. Up until now, we have not used these bonds to pay her tuition because we would not qualify for the deduction based on income.</p>
<p>I know there are many rules and fine print to use these bonds. I was on the website and my head is spinning. Frankly, I wish we would have done something else but who knew where we would be in 20 years incomewise . Anyhow, wondering what we should do with these. Here are the options I have narrowed them down to:</p>
<ol>
<li><p>Use them to pay off the last semester of tuition. We would not get the deduction but maybe we can reject the last semester stafford loan thereby lowering her debt.</p></li>
<li><p>Use them to help her pay for graduate school, if she chooses to go. Again, we would not get a deduction either due to income or because she might not be on our return at that point. </p></li>
<li><p>keep them and use them for D2’s tuition two years from now.</p></li>
</ol>
<p>I am leaning towards option 1 to help her lower her student debt. She does not know if she will go to graduate school straight out of college. She prefers to get a job or paid internship to get some experience and then consider it. Graduate school will be on her as we will not have funds to pay for that.</p>
<p>Would love to hear your thoughts or if you have done something similar.
Thank you</p>
<p>I cashed in a couple of (small) savings bonds last year because they had reached final maturity and were no longer earning interest. That was a pretty easy decision. For bonds issued after 1989 you might be eligible to exclude the interest from income (I think that’s what you meant by “deduction”) if the proceeds are used to pay tuition. If your bonds continue to earn more than 3% and you are definitely not eligible for the interest exclusion from income, I would just hang onto them.</p>
<p>We bought $10K face value of these from 1990 to 1992 and they mature 2020-2022. They are earning a 5% yield so we have no plans to cash them out until they mature - where else can you get a Treasury-guaranteed 5%? The interest income would be state tax exempt. There are income limits on taking the interest tax-free and they wouldn’t have applied to us even back then. I don’t know if the amounts were indexed or not but I’m guessing that we can’t take advantage there.</p>
<p>Good point. Some of these are still earning interest. I guess I should sort them out and cash in the ones that have matured. The other’s one should definitely be earning better interest then what the bank pays these day. duh, I was so focused on the tax deduction (exclusion) that I forgot the most important part. Thank you guys.</p>
<p>This past weekend I downloaded a program from Treasury Direct and installed it (Windows). It allows you to manage your Savings Bond portfolio. You enter in the serial numbers and the program shows you the purchase price, interest, value, maturity date, yield and other things. You can run the program whenever you want to and don’t have to re-enter the serial numbers. They also have a web application to do this but I think that you have to re-enter your information every time.</p>
<p>BC - It looks like a EE bond purchased in 1990 -1992 would have earned 6% for its original 12 year maturity period. After that, it would just earn the current market rate for EE bonds, which is now less than 1%.</p>
<p>We cashed in all of S’s savings bonds last fall. BIg hassle. We had to open a treasury acct because you are only allowed to cash in something like $1000 at once at a bank. Once we opened the acct then we had to transfer the bonds to the acct and request a withdrawal. It took some time to finally get the money. Luckely we did not need the funds for anything, we just wanted to put it somewhere we had more control over. We did not qualify for the tax deduction so it made no sense to keep the money tied up in bonds.</p>
<p>^^but there is a weird little quirk that bonds in the student’s name can not get the tax deduction even if spent on education (unless the student was over 24 when they were purchased). Kind of a mean little rule in my opinion as I know lots of people buy bonds for their kids or grandkids as a way of saving for education.</p>
<p>Thanks, BC Eagle- I am now planning to pull out all of our bonds and get them organized and see what is what. I know we have some that are just collecting dust these days. Time to move these bonds along. This is just what I needed!</p>
<p>Our state has an interest and dividends tax. US Government debt is exempt.</p>
<p>I may have been talking about the interest not being taxed for valid college expenses. I’d have to look at the page posted earlier. I don’t know that we can generate $10K in college expenses right now.</p>
<p>I have a question… are these your daughters bonds that were gifted to her? Or are they just something that you purchased for the point of doing this?</p>
<p>If they were gifted to her maybe you should ask her how she wants to use them.The reason I ask is my grandparents gifted me a bond each year from when I was born till I was 18, then they switched over to cash. I could have turned them in towards my student loans or car or whatever but I decided to hold on to them till I was 25 and I cashed them all in at once and bought a nice living room set of furniture for my house that i had just bought myself. My grandmother is so proud that I saved her bonds all those years and she basically wound up paying for this awesome furniture in my house.</p>
<p>OK, the embarrassing question. If our kids were given savings bonds when they were born and we lost them … is there a way for us to figure out what the kids were given and to still redeem them? </p>
<p>If Your Bond is Lost or Destroyed after You Receive It - To get your bond replaced, fill out Form PD F 1048 and follow the instructions.</p>
<p>Mail the completed form to:</p>
<p>Bureau of the Public Debt
P.O. Box 7012
Parkersburg, WV 26106-7012</p>
<p>NOTE: Once you receive replacement bonds or payment for lost bonds, the original bonds belong to the U.S. Government. If you find bonds after receiving replacements or payment for them, please return them to us! Replacement bonds will show the original issue date. </p>