US Savings Bonds - better than putting your money in your mattress
Filed under: Saving Money, Wealth, Investing
With all the confusion in the financial markets these days, the good old, reliable United States Savings Bond comes through once again as the absolute best investment available today. Because of all the bank failures and consolidations, many individuals have reservations about placing their money into any investment. Many investors have commented that they are so concerned about the amount of failures and takeovers they are not even putting their money into bank CDs. But not savings bond owners.
Savings bond owners are recognizing this huge opportunity and are adding to their portfolios while people unfamiliar with savings bonds are learning that this is one of the greatest investments ever offered.
Series "I" U S Savings Bonds issued between November 1, 2008 and April 30, 2009, will earn interest at the rate of 5.64% (an annual rate) for the first six months from their date of purchase. This beats any other investment available today having the same degree of safety and security. Also, money invested into savings bonds earns compound interest and grows tax-deferred until redeemed, or the bond(s) reach their final maturity in 30 years. And now with this historically high interest rate of 5.64%, this is an unprecedented opportunity to add to your investment portfolio with one of the safest investments in the world.
However, I suggest that you move quickly. As was reported in an earlier blog, the Treasury Department has reduced the limit on the amount of money that any one person can invest in paper savings bonds in a single year to only $5K. So, unless you have already purchased some series "I" paper savings bonds, you have a unique opportunity to invest up to $5K in series "I" bonds in December, and then purchase another $5K in January, 2009. That way you will have $10K worth of savings bonds, earning interest at the rate of 5.64%, working for you. This is not too shabby.
Furthermore, if you are married, or have children, you can purchase $5K more as a Co-Owner with your spouse and also as a Co-Owner with each of your children. Grandparents should take particular notice. Start building - or adding -- to your grandchildren's college fund with a high yielding savings bond investment just in time for Christmas.
So, if you are planning to invest some cash, you shouldn't hesitate to purchase some series "I" savings bonds right away. This tremendous investment opportunity will only be available through the end of December and then it will be gone forever. Remember the saying "He who hesitates is lost."
Jack Quinn is a personal finance writer and editor for SavingsBonds.com. Jack has helped Savings Bond owners better understand their investments for more than 15 years.
Reader Comments (Page 1 of 1)
12-04-2008 @ 3:22AM
Paul said...
The idea of using US Savings Bonds for a security investment has never appealed to me because of interest rate risk. Why would anyone tie up their money in a 30 year security? Some money markets, in the late 1970's were paying an interest rate of 18%; Is it not conceivable that interest rates could again sky-rocket within a 30 year frame?
Researching the "I" 30 years Saving Bonds, I discovered that this strategy to purchase these bonds is feasible. The bond, at 5.64 is really competitive in this market. The good news is that, you can redeem the bonds after a 12 month period. The penalty if it's within 5 years, it's only 3 months of interest.
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12-04-2008 @ 7:24AM
Susan Williams said...
Kathie Lee Gifford has more talent and personality than any of you male idiots combined. You feel threatened by her because she is smart and talented and won't take your crap. America loves Kathie Lee Gifford. She actually has a personality and is not like the plastic and anorexic Kelly Ripa. Kathie Lee Gifford is real. You men out there who have to follow other men like Howard Stern and the weirdo, Hugh Hefner are pathetic and weird yourselves.
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12-04-2008 @ 9:39AM
Marilyn said...
My dad always gave saving bonds as gifts for babies and small children. I learned early to save--and am a believer about CDs--when I am planning a trip--and the CD is due--I open a vacation acct.-with some of the money-and since my first child was born 30yrs ago--i enrolled in a direct deposit out of my paycheck to purchase one bond a month for each child--today they have substanial savings that i plan to give them if they need it--keep bonds in a safe deposit box-(the box is tax deductible) with all your important papers.I told my daughters--as soon as they got their first job--to start saving for retirement--do not expect the government to take care of you--save a small amt from every paycheck--when it buids up--look to a CD--
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