When on another post someone asked if there was a way to get miles for paying tuition for a college that does not let you charge it on a credit card, it got me thinking since I have an 8th grader at home. I had been buying I Bonds on line here and there, but not with any diligence. These I bonds are bought at face value and are paying 6.98 % right now,guaranteed until the end of april, of course can change, but it is tied to the inflation rate and I think will be as good as any savings bank. I have money saved in a savings account - so I've decided to buy a bond a day, using my double miles citi click card. There is no penalty if these ponds are cashed in 5 years. There is a 3 month interest penalty if cashed after 6 months but less than 5 years. (big deal). The bonds are in my name, with my daughter as beneficiary and might be eligible for tax waiver for college if our tax bracket fits in. So, it's like getting double miles (single after May 31st when the click double miles offer expires, or single if using another Visa or MC (they don't take AMEX) for putting money in a CD. So, when my daughter goes to college, there will money for tuition that got me lots of miles even if they don't let you charge it.!
www.savingsbonds.gov

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DtG

You seem to have made a very good decision and have a nice fund for your daughter. Are you absolutely certain of current interest rate you listed?

You can go to the web-site and check it out. They list the rate of each kind of bond and explain how they come up with the rate. Each rate is guaranteed for 6 months. It has a base rate of about 3.4% and then a rate added related to the rate of inflation. So it can never go below 3.4 and could be anything between. After 6 months they can be cashed with a 3 month interest penalty. If you have money sitting a saving account paying less, you might think about it. It really is more liquid than it seems. And if my daughter's college takes credit cards and I have the money to pay for it and the rate is good on the bonds, it will be there for retirement ( which might not be so far away.)I think it's a better deal the CD"S

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DtG

dgordon, as usual, you're always on top of it posting great info! Thanks for the tip!

Are these just U.S. savings bonds? Lots of interesting special tax rules apply (IRC section 135), but only if your income is below fairly modest limits.

Bruce

These are regular savings bonds. The only difference is that I bonds are sold at face value, have a guaranteed minimum interest rate and is tied to inflation. And yes, if our income is low enough, we could get benefits if used for college. It probably won't apply because who could afford to live and send your kid to college even with a lot of bonds. So, even w/o tax savings, I think it is worth doing since it is money sitting in a bank waiting earmarked for college anyway. It's great if you are giving a gift as well,, - instead of check that doesn't give points, you can give a bond.

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DtG

Another one being brought back.

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DtG

Do you have any info on the double miles ClickCiti card.Will be much appreciated.

Unfortunately, that promo ended last May. You got double miles for a period of time. Sorry that the title is a little outdated. I certainly wish that the double miles offer would return.

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DtG