A Message from your Friendly Neighborhood Tax Preparer

Another couple weeks and the blog postings will pick up again.

But here's a tip to share with my friends with children out there.


You can buy them from the bank or from TreasuryDirect. You pay face value for the bond and as of this posting they are earning 6.73%. They can be cashed in 5 years if necessary without penalty. With penalties they can be cashed as soon as 1 year.

But the clincher is this. The interest earned on these would be tax-free if used for your child's education, but ONLY if the owner of the bond is 24 or older at the time of purchase. in other words, DO NOT BUY THEM IN YOUR CHILD'S NAME.

Since it is tax season and I've got plenty of work going on here, I will leave it at that. Food for thought for parents out there. But before purchasing, please research for yourself and decide whether investing in I-Bonds makes sense to you.

It does for me, so I bought some yesterday.

One thought on “A Message from your Friendly Neighborhood Tax Preparer”

  1. As of May 1, 2006 new I-Bonds purchased are earning 2.47%. Should anyone be upset? Supposedly this is lower because there are less inflation concerns, so the inflation adjusted portion of the I-Bond is much lower, creating a drop of over 4%. Does this mean my dollar should have a lot more spending power and I should breathe a sigh of relief? I guess so. Since inflation is not a worry, I can spend all my extra money on gasoline. Hooray.

Leave a Reply

Your email address will not be published. Required fields are marked *