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Author: ENCOLA Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121219  
Subject: Tax exempt bonds vs. stocks Date: 5/31/2000 10:41 AM
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I just received 9 $1000 gov't EE bonds from my parents for graduation. They are earning 6.00% and are currently worth $826.80 each. The final maturation date is in 21 years. The bonds are in my parents name so the interest is tax exempt if I use them for education. However I am receiving a more than full scholarship to an undergraduate school, and as such will not need any of the bonds for school expenses.

My idea is to use the bonds as payment for law school in 4 years. I have looked into the Foolish four and several index funds. My question is: would it be better to leave the money where it is or to invest in stocks or funds. If I were to cash in the bonds I would have to pay taxes on the interest earned and on any future interest, but it would be at the tax rate of a student who is not planning to work. None of the scholarships I am currently recieving are need based so I would not endanger them by putting the investment in my name.
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