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How to get savings bond facts

Q: My wife is purchasing Series EE U.S. savings bonds every month through her employer's payroll-savings plan. The bonds are in our daughter's name and will help pay for college (she's in the eighth grade).

How do I know when the bonds mature? How do I know what the current interest rate is? When I cash the bonds in for our daughter's college education, will they be tax-free? Is it a good idea to purchase savings bonds exclusively, or should we also invest in mutual funds?

A: Currently purchased Series EE bonds are guaranteed to reach their original maturity _ face value _ in 18 years, but you don't have to hold them that long. You can cash them all in when your daughter goes to college, at which time you'd get one-half face value plus the accrued interest.

The current guaranteed interest rate is 4 percent. Once you've held the bonds for five years, their variable-rate feature goes into effect.

When you cash in the bonds, they may not be "tax-free." For example, any you've purchased in your daughter's name won't be tax-free. To qualify for the tax break, they have to be registered in a parent's name and purchased after Jan. 1, 1990.

You can transfer the bonds to your name through Form PD 4000, which your bank might have.

Even if all the bonds are registered in your wife's name or yours, you still need to meet income requirements to be eligible for the tax break.

You can get a pamphlet from the Treasury Department that spells out the eligibility rules for tax-free status. Your wife's employer or the bank that provides the bond purchase forms should have one.

Should you mix the purchase of Savings Bonds with the purchase of mutual-fund shares? Perhaps. The bonds pay a guaranteed rate of 4 percent, but the cost of college is going up at double that rate. You might put part of your money into savings bonds and the rest into a growth mutual fund. You would incur more risk, but you might have a better chance of keeping pace with college costs.

You can learn the redemption value of EE bonds by writing to the U.S. Savings Bond Division, Department of the Treasury, Washington, DC 20226. Ask for Form PD 3600, which is free.

More detailed information _ including interest accrued each month _ is available in "table of redemption value" booklets, each covering six months, sold by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402. The EE version costs $1.

You can get all the numbers worked out by the Savings Bond Informer service. For $15, the service will research up to 25 bonds for you. Call (800) 927-1901.

Q: If my husband is the primary beneficiary of my individual retirement account and my children are the secondary beneficiaries, in the event of my death, would it be possible for my husband to refuse all or part of my IRA and allow it to go to my children?

A: Yes. Your husband could "disclaim" the right to be the primary beneficiary because it might not be advantageous in taxes. Your children would get the assets and would have to pay the tax.

William Doyle welcomes written questions, but will be able to give answers only through the column. Address questions to William Doyle, King Features Syndicate, 235 E 45th St., New York, NY 10017.

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