What Grandparents Need to Know About Using Savings Bonds for a Grandchild’s Education

It’s not easy, but grandparents can avoid a tax bill when redeeming savings bonds to pay for a grandchild’s college costs.

Question: Can I use my series EE or I bonds to pay for a grandchild’s college—and save on taxes?

Answer: You can redeem savings bonds to help cover the cost of college, and in some cases the interest the bonds earn won’t be subject to federal income tax. But as a grandparent, you’ll likely have to jump through some hoops and meet income limits to avoid the tax.

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Lisa Gerstner
Editor, Kiplinger Personal Finance magazine

Lisa has been the editor of Kiplinger Personal Finance since June 2023. Previously, she spent more than a decade reporting and writing for the magazine on a variety of topics, including credit, banking and retirement. She has shared her expertise as a guest on the Today Show, CNN, Fox, NPR, Cheddar and many other media outlets around the nation. Lisa graduated from Ball State University and received the school’s “Graduate of the Last Decade” award in 2014. A military spouse, she has moved around the U.S. and currently lives in the Philadelphia area with her husband and two sons.