Ask Terry Questions EE Savings Bonds for Grandchildren

EE Savings Bonds for Grandchildren

By Terry Savage on March 02, 2014 | College Savings / Student Loans

We presently have been blessed with three grandchildren and I’m sure there will be more down the line! We have been purchasing series EE US Savings Bonds for them on special occasions (roughly $100 per child per year). The bonds are in their names with their mother as the beneficiary. Is there a better ‘savings’ for them? I don’t know if they will use these bonds for college (hopefully), but we’re not sure if we’re doing the right thing with these bonds or not. Thank you for all of your wonderful advice. I plan to read MUCH more of your website — SO MUCH useful information here!!

Terry Says:  Stop purchasing Series EE bonds!  I was a big fan of them for years, but they changed the formula and they are no longer a good deal.  Instead, you need to open 529 College Savings Accounts, where all the money you invest will grow tax-free for college.  Go to and ask about their plans, which are the least expensive.  You don’t have to open a separate account for each child, but you can.  Or if there are several families involved, open one account for a child in each family — and the money can be used by any child in the family.  You’ll have a choice of investments, or you can let them put you in their “age based” plan,  which invest appropriately for the age of the child and years till the money is needed.  That’s a far better choice than savings bonds these days!



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