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Are Savings Bonds Still Viable?
Let�s be honest with ourselves, saving bonds are not as risky or as exciting as stocks, but, isn�t that basically the point? While there�s pretty much no such thing as a no-risk investment, chances are, a savings bond is about as risk-free as your going to get, especially US savings bonds. Chances are, you or someone you may know, was probably given one as a child. The unfortunately part of this all is that the popularity of these investment vehicles have been on a slow decline as few people are totally aware of there benefits. There is a reason why most of the successful stock market millionaires also hold a position in US saving bonds. There�s a very good reason for it.
What is a US Savings Bond?
Saving bonds are pretty much a type of long term investment that used to be fairly popular. There are quite a few different types of savings bonds out there, but these types of saving bonds are without a doubt the most reliable, being backed by the US government in guarantee and quality that is something that plays on the positive aspects of a US savings bond. In simple terms, a savings bond of this type is essentially a loan to the US government and the bond itself is a guarantee that the �loan� will be paid back in full after a set duration of time during which time, the bond will mature.
Where Can I Buy a US Savings Bond?
If you�re looking for a savings bond, then the best place to acquire one would probably be from your local bank. Savings bonds can be purchased for a set amount for a set fee. In most cases, the fee is half the amount of the total value of the bond, so they are essentially a fantastic way of saving money for something long term without all the hassle. This is why US saving bonds have been determined to be a top investment choice, one of the most reliable and predictable of bonds. In short, the best place to acquire a US savings bond would be from your local bank.
How Long Must I Wait Before Cashing in My Bond?
Depending on the type of bond you purchased, the maturity date will vary. Knowing the type of savings bond before you purchase is always an intelligent move. Since you purchase your I-bond at face value and receive interest annually, you will be able to cash in at anytime after 12 months from the date you purchased it. However, it is important that you keep in mind that if you cash in your I-bond within the first 5 years, there will be a 3 month interest penalty. This is to encourage long term savings. As for Series EE Bonds, if you hold till maturity, you will not get any interest on your investment after that period. So remembering your maturity date is very important. You can cash in a Series EE Bond at anytime after 12 months of purchase date.
Saving bonds are not the type of thing just anybody can get into. Some people are more interested in the type of investment they can get a quick return from, and that is okay, just not ideal for US savings bonds. Despite this, it is a great way of getting your feet wet as far as making investments go, and putting some money away for a rainy day.
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