College Savings Bonds & Types ,Benifits & Investing of College Saving Bond


Been a working individual, one of your top priorities always will be to make and save money for yourself, but if you are a parent, then you need to save money for your kid’s education too.

What I intend to discuss today through this article is about your child’s college savings, especially the importance of College Savings Bonds.

Education for your children is always on the top priority for any parent. Rising education cost especially for 4 years tuition in both public and private colleges is always a big worry, more so because costs are rising every year at a steep rate.

This means you need more than plain savings for your child’s future education- you need to have a planned disciplined savings. One important way which could make you a disciplined investor is through investing in College Savings Bonds.

Such savings bonds will let you put a sufficient amount for your children as well grand child’s future education. These bonds are issued by the US Treasury Department and hence can be trusted for life. They are also known as the Federal Savings Bonds.

There are many types of such College Savings Bonds and some are convertible too. The most famous College Savings Bond is the growth oriented 529 Plan which has some tax and other advantages for investors.

If as a disciplined parent you start investing in a 529 plan at the birth of your child, say an annual contribution ranging from USD 3000-5000, you can make a fair amount for your child’s education in any good public or private college.

More over since you are investing in a bond you can rest assured that you will get access to the full principal amount when the bond tenure finishes. With such College Savings Bonds you can also be sure that your child cannot misuse the amount. Here’s why.

The College Savings Bonds also enjoy tax exemption under the Savings Bond Education Tax Exclusion scheme. Under this scheme the year you plan to redeem the bond your child should be atleast 24 years old and pay for the college expenses (same year) and give adequate proof for the same to enjoy the tax exclusion.

You also need to file joint returns if you are married and meet certain income regulations. And finally make sure that you enroll your child to one of best colleges which meet the basic requirements of the Federal government, that is one which you are sure is covered by the Federal education assistance programme.


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