you can use the bb bonds relatively tax free if cashed and used for qualified educational expenses, which includes contributions to a qualified tuition program such as a 529 college savings plan.; Selling the ee bonds to convert into a Section 529 college savings plan is considered a qualified educational expense. The interest earned on Series EE US savings bonds issued after Dec 31, 1989 and all Series I bonds may be tax free when the bonds are redeemed to pay for qualified higher education expenses or rolled over into section 529 college savings plans, or etc. |