Hold 2 year Treasury till maturity

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betterfuture
Posts: 1
Joined: Wed Sep 21, 2022 9:34 pm

Hold 2 year Treasury till maturity

Post by betterfuture »

Hi
I have some funds in money market for my kid college expenses. Can I buy the 2 year treasury and hold to maturity to make 4% of the money I’m looking to spend for the second year of college?
My kid is senior now and joining college in fall 2023.

Thanks in Advance
howard71
Posts: 254
Joined: Wed Oct 28, 2020 11:10 am

Re: Hold 2 year Treasury till maturity

Post by howard71 »

Welcome to the forum.

Sounds like a perfectly good idea to me.
exodusNH
Posts: 5370
Joined: Wed Jan 06, 2021 8:21 pm

Re: Hold 2 year Treasury till maturity

Post by exodusNH »

betterfuture wrote: Wed Sep 21, 2022 9:56 pm Hi
I have some funds in money market for my kid college expenses. Can I buy the 2 year treasury and hold to maturity to make 4% of the money I’m looking to spend for the second year of college?
My kid is senior now and joining college in fall 2023.

Thanks in Advance
Sure.

Just note that you will pay federal income tax on the coupons. If you trust your child and they have little income, they could set up an account and hold the note, which would be subject to their lower marginal rate.
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Mel Lindauer
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Re: Hold 2 year Treasury till maturity

Post by Mel Lindauer »

If you qualify (income wise) for the tax- free treatment of I Bonds when used for qualifying educational expenses, the I Bonds could be an excellent choice.
Best Regards - Mel | | Semper Fi
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