"Are savings bonds tax exempt?"?

Answer 1

Partly. You pay federal taxes on the interest, but not state taxes. Also, you can use savings bonds for education purposes and the interest from them is tax exempt if you might the right criteria. I have included a link to US savings bonds, and also for savings bonds used for education purposes. You also have a choice as to how to declare the interest earned on the savings bonds for tax purposes. You can either wait until you cash in the savings bonds and have all the interest be taxable in the year you cash them in, or you can calculate each year the change in the value of the savings bonds from the prior year, and increase for that year is your interest earned for that year.

Answer 2

You pay federal income tax on the interest, but not state income tax.

There are some circumstances where bonds cashed for education expenses can be tax-free, but those conditions are not usually met.

Answer 3

Yes I do believe they are!! I think thats why its a good way to have savings!