What should I do with my children's savings bonds?

Question

After the birth of my children we were given savings bonds from family members. What is the best thing to do with them?

Answer 1

If you use Series E bonds to pay for college you generally do not pay tax on the interest earned. There are exceptions and it is best to check with the savings bond website or a tax professional.

From a financial standpoint you can probably do better cashing in the bonds and investing the money for a higher rate of interest.
You need to be careful though, since now you have to hold on to a bond for a certain amount of time before redeeming it to avoid an interest penalty. If a bond is paying 4% interest it will take the bond about 18 years to mature. If you go to the savings bond website you can create a savings bond inventory that will allow you to keep track of the value of the bonds.

From a family standpoint you may want to keep the bonds so as not to offend the people from whom you received them. If you are going to keep them, put the bonds in a safe deposit box along with a copy of the serial numbers. If the bonds are ever lost or stolen you need the serial numbers to help you.

Answer 2

I believe savings bonds, once matured, dont gain any more in value. Usually a bond lasts 7 years. If the kids are young and still have more than 7 years until they turn 18,(and the bonds are already mature) renew the bonds or invest it in a CD or interest bearing account.

Keep them for college!!

Answer 3

Save them and let the saving bonds grow interest. And then give it to the child when they turn 18.(to use for college are whatever).

Answer 4

depends on the am mounts. If small then just keep them in a safe place. If the am mounts are large then cash them and invest in a savings plan for their education. Much larger returns.