Series EE and I Savings Bonds for College Savings

U.S. Series EE savings bonds issued after 1989 or Series I saving bonds offer a tax-advantaged way to save for college.

Advantages

Backed by the full faith and credit of the United States government, the interest from these bonds is tax-free if used for qualified higher education expenses. Also, interest on Series EE and I savings bonds is usually exempt from state and local taxes.

Disadvantages

Income limits apply. In tax year 2015 the full interest exclusion is only available to couples filing jointly with modified adjusted gross income of less than $115,751, and for single filers with modified adjusted gross income of less than $77,200 The interest exclusion phases out completely if your modified adjusted gross income is over $145,749 for joint filers and $92,199 for single taxpayers. You can learn more about the Educational Savings Bond Program in IRS Publication 970: Tax Benefits for Education.

The rules for using savings bonds for education can be complicated. To learn more about using savings bonds for educational expenses, you can call the Federal Reserve toll-free at (800) 553-2663. You can call the Bureau of Public Debt toll-free at (800) 487-2663 for information on the latest rates for Series EE and Series I savings bonds, or at (800) 722-2678 to learn how to buy savings bonds directly from the federal government.

Savings Bond Online Resource

The Bureau of Public Debt's website provides information on the latest rates for Series EE and Series I savings bonds and how to buy savings bonds directly from the federal government.