Savings bonds after graduation

NJres
Tue, 12 Jun 2012 13:13:59 +0000

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.