Laddered Zero-Coupon Bonds would best meet their goal.
Those bonds that will not pay interest in the life of bonds refers to Zero Coupon Bonds. The investors will be getting this type of bonds with greater discount from their original value. These will be achieved by them during the time of the maturity of that bond.
In the given example, John and Susan Smith do not wish to have additional income in their current state and want to gain some investment in future for the purpose of making their children college studies. The period of waiting is about 12-15 years and hence they can make investments in Laddered Zero-Coupon Bonds.
