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. 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.
  3. 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.
  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. 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.
  6. 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.
  7. Investing

    How To Choose The Right Bond For You

    Bond investing is a stable and low-risk way to diversify a portfolio. However, knowing which types of bonds are right for you is not always easy.
  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. Personal Finance

    5 Colleges That Are Slashing Tuition Costs

    Schools are cutting tuition fees because of the economic times. We tell you which ones are cutting prices.
  10. Retirement

    4 Smart 529 Plan Alternatives to Consider

    Learn about some alternatives to the popular college-saving 529 plan that may also make sense, such as prepaid tuition plans and Coverdell accounts.
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. 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 >>
  4. 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 >>
Hot Definitions
  1. Fintech

    Fintech is a portmanteau of financial technology that describes an emerging financial services sector in the 21st century.
  2. Ex-Dividend

    A classification of trading shares when a declared dividend belongs to the seller rather than the buyer. A stock will be ...
  3. Debt Security

    Any debt instrument that can be bought or sold between two parties and has basic terms defined, such as notional amount (amount ...
  4. Taxable Income

    Taxable income is described as gross income or adjusted gross income minus any deductions, exemptions or other adjustments ...
  5. Chartered Financial Analyst - CFA

    A professional designation given by the CFA Institute (formerly AIMR) that measures the competence and integrity of financial ...
  6. Initial Coin Offering (ICO)

    An Initial Coin Offering (ICO) is an unregulated means by which funds are raised for a new cryptocurrency venture.
Trading Center