DEFINITION of 'Baccalaureate Bond'

A zero-coupon bond issued by certain states to assist families in saving for college tuition by means of added tax benefits. Baccalaureate bonds are offered by many states and are tax-free securities that allow states to lend at reasonable rates, while issuing tax-free bullet bonds to citizens wishing to save over time for post secondary expenses, namely tuition.

BREAKING DOWN 'Baccalaureate Bond'

These bonds are typically issued in small denominations and are offered in several maturities, making them more convenient for investing and paying yearly college tuition fees. In some states, additional benefits such as tuition discounts may be included if the student enrolls in a state college using these bonds for payment. When combined with other tax-advantaged college savings tools, baccalaureate bonds are an efficient way of saving toward post-secondary education.

RELATED TERMS
  1. Prepaid Tuition Program

    One of the two major types of 529 plans. Prepaid tuition plans ...
  2. U.S. Savings Bonds

    A U.S. government savings bond that offers a fixed rate of interest ...
  3. 529 Prepaid Tuition Plan

    A tax-advantaged method for paying future college tuition costs ...
  4. Qualified Higher Education Expense

    Expenses such as tuition and tuition related expenses that an ...
  5. Tuition Insurance

    A type of insurance that allows families to recoup some or all ...
  6. 529 Savings Plan

    A tax-advantaged method of saving for future college expenses ...
Related Articles
  1. Personal Finance

    Stop Procrastinating! Enroll In A College Savings Plan

    The cost of sending your kids to college could be a serious financial burden - unless you get prepared. Now.
  2. Personal Finance

    The Last States With Prepaid Tuition Plans

    Prepaid tuition could save you thousands of dollars and unwanted stress. Find out where you can still find them.
  3. Managing Wealth

    A 529 Plan Fit For An Ivy League Education

    The Independent 529 plan offers a unique investment for those wanting to send their kids to the best colleges in the U.S.
  4. Managing Wealth

    Great (Financial) Gifts For Kids This Christmas

    Parents, grandparents and other interested adults can give financial gifts to children that can help secure their futures, whether it’s saving for a first car, college or a down payment on a ...
  5. Personal Finance

    Tips For Going To College As A Mature Student

    Learn the special considerations mature adults need to make when pursuing a post-secondary education.
  6. Financial Advisor

    Using 529 Plans to Save for College

    Paying for college is no easy feat. Here is a lowdown on 529 plans, the educational savings plans that help families set aside funds for college costs.
  7. Personal Finance

    How to Get Paid to Go to School

    Tuition benefits, grants and scholarships can help you get paid to go to school, and enjoy the payoff from your degree without racking up student debt.
  8. Investing

    Surprise! The Best Long-term Bond Investment May Be Savings Bonds

    A 20-year Series EE savings bond pays more interest than a 20-year Treasury bond. So are government-issued long-term bonds the best bet going?
  9. Insights

    Top 10 Companies That Will Pay for School (SBUX, T)

    Scrutinizing employee benefits can help people in the job market chose employers strategically to find companies that will pay for school.
  10. Taxes

    Maximize Your Tuition Tax Benefits This Year

    To help college students pay their tuition bills and give America that extra push to get an education, the government has come up with a $2,500 tuition tax credit.
RELATED FAQS
  1. How does an investor make money on a zero coupon bond?

    Learn about investing in zero-coupon bonds, exactly how they work as an investment vehicle, and their advantages and disadvantages ... Read Answer >>
  2. 529 plans may do all of the following except: a) As a prepaid tuition plan ...

    Free info on financial certification exams including study guides, exam questions, and much more! Read Answer >>
  3. How long will it take for a savings bond to reach its face value?

    Learn essential information about U.S. savings bonds along with an explanation of the unique characteristics of this popular ... Read Answer >>
  4. What is the difference between a zero-coupon bond and a regular bond?

    The difference between a zero-coupon bond and a regular bond is that a zero-coupon bond does not pay coupons, or interest ... Read Answer >>
  5. What are some examples of how I could use my IRA savings for college?

    Use your traditional IRA for qualified college expenses for you or your family. The retirement funds can be used for books, ... Read Answer >>
Hot Definitions
  1. Life Insurance

    A protection against the loss of income that would result if the insured passed away. The named beneficiary receives the ...
  2. Price Elasticity Of Demand

    A measure of the relationship between a change in the quantity demanded of a particular good and a change in its price. Price ...
  3. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
  4. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Down Round

    A round of financing where investors purchase stock from a company at a lower valuation than the valuation placed upon the ...
Trading Center