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View Full Version : Do you have any U.S. savings bonds?



Sohia Rose
07-17-2007, 02:10 AM
My brother swears by U.S. savings bonds, but I'm a little skittish. Do you have any of these bonds? Any trouble with them? He told me they mature in 10 years.

alleycat
07-17-2007, 02:22 AM
Savings Bonds are a bit old-fashioned these days (in my opinion). I think you'd do just about as well with a short or medium-term bond fund (as long as you understand how bonds are priced). But there's nothing wrong with savings bonds. I have some . . . somewhere. If I could find them.

If held to maturity, the rate is guaranteed, and they're as safe as any investment you can make.

Gary
07-17-2007, 04:35 AM
I have some I've held for 32 years, and I've had others in the past that matured and had to be cashed. In the past, they were mostly money losers, but safe. My bonds today are drawing more interest than anything else I have, so it's a mixed bag.

Sohia Rose
07-17-2007, 04:57 AM
Thanks!

What about inflation? Is it worth it? I'm also concerned about taxes. Does the government tax the interest? Is it counted as an asset, even before they are cashed in?

Scrawler
07-17-2007, 10:25 PM
My husband has had some for years. I have no idea what he does with them, he's had them BM (before marriage)

Tish Davidson
07-17-2007, 10:45 PM
Thanks!

What about inflation? Is it worth it? I'm also concerned about taxes. Does the government tax the interest? Is it counted as an asset, even before they are cashed in?
.
Points in their favor:
They are very very low risk
You can buy them in small denominations, as low as $25, so if you aren't good a saving large amount of money, you can save small amounts often.
You can buy them at any bank and cash them in at any bank. No broker or other financial professional needed.

Mixed bag
Interest rate is fixed. Inflation will diminish your profits (relative to other more flexible investments). Deflation will make you richer (again relative to other more flexible investments)
You pay tax on them when you cash them in. This gives you some flexibility in that you can cash them in when you have a lower earning year and are in a lower tax bracket.

Points against them
Your money is locked up for a long time. Other investments often offer better interest rates.

Another simple option available at your bank is certificate of deposit (CD). These pay interest but have maturity terms ranging from 6 months to several years. If you need more flexibility and want to keep it simple, this might work for you, although most CDs require at least $500.

Sohia Rose
07-18-2007, 01:15 AM
Thanks again.

I went to their website, and of course, they didn't give me the fine details. No one I know (other than my military brother) has any of these bonds.