Are U.S. Savings Bonds Still Relevant?
Tuesday, June 12th, 2007 Subscribe To Our Feed
As a child, I remember getting my first savings bond. It was exciting! I was putting money away for my future, and getting a better rate of return on my money than the bank provided. Eventually, that little savings bond grew into a down payment for my first house. There are many reasons why your investment portfolio should hold onto some savings bonds, and its a shame that fewer and fewer people are taking advantage of this very useful investment vehicle.
What is a U.S. Savings Bond?
Savings bonds are a type of long term investment that used to be rather popular. There are a whole slue of different types of savings bonds out there, but this type of savings bonds are by far the most reliable, being backed by the United States government in quality and guarantee, and that is something that definitely plays on the positive side of the U.S. savings bond. In all actuality, a savings bond of this type is actually a loan to the U.S. government and the bond itself is a guarantee that the ‘loan’ will be paid back in full after a set period of time during which the bond will mature.
Where Can I Buy A US Savings Bond?
If you are looking for a good savings bond, the best place to get one would probably be from your local bank. Savings bonds can be purchased at a set amount for a set fee. Usually, the fee is half of the amount of the total value of the bond, so they are a fantastic way to save money for something long term without all of the fuss. This is why U.S. savings bonds have been determined to be a type of investment, and one of the most reliable and predictable ones at that. In short, the best place to start looking for a good U.S. savings bond would be your local bank.
How Long Do I Have To Wait Before I Can Cash in My US Savings Bond?
Depending on the type of bond you purchased, the maturity date will differ. Knowing your savings bond before you buy is always a smart move. Since you purchase your I Bond at face value and receive interest annually, you can cash in any time after the 12 month period after you initially bought. However, its important to remember that if you cash in your I Bond within the first 5 years, there is a 3 month interest penalty. This is to encourage long term savings. As for the Series EE Bonds, if you hold til maturity, you do not get interest on your investment after that period. So remembering your maturity date is key. You can cash in your Series EE Bonds any time after the first 12 months after you bought them.
There is of course that little annoying thing called taxes! There are some tax advantages to owning US Savings Bonds, so it pays to ask your bank about them. If you are looking for a long term investment vehicle, that will help protect your hard earned money, then US Savings Bonds are for you. You don’t have to own all savings bonds or all stocks. A mix depending on your age is always a good bet. Protecting your money is what its all about.
Technorati Tags: No Tags
Related Tags: No Tags
Possible Related Posts
