saving money question...

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Are US Savings Bonds a joke? Something you buy for you grandkids only?

I had them when I was a kid, now I'm thinking of buying some periodically because they're so solid, if not the highest interest rate. I also have a 401(k) plan.

While you can still buy paper ones, they're really pushing the 'e' version, which are held in some faceless/nameless super computer somewhere... would you trust this for 30 years?

http://www.treasurydirect.gov/indiv/products/ibonds_glance.htm

― andy --, Tuesday, 13 December 2005 20:50 (nineteen years ago)

6.7% is a good return.

― laurence kansas (lawrence kansas), Tuesday, 13 December 2005 20:53 (nineteen years ago)

Although I think the I-bond is subject to taxes on the interest.

― laurence kansas (lawrence kansas), Tuesday, 13 December 2005 20:56 (nineteen years ago)

Yes, there is tax on the interest earnings.

― andy --, Tuesday, 13 December 2005 21:00 (nineteen years ago)

EE bonds are federally taxed on the interest too, when you cash them in.

― Jaq (Jaq), Tuesday, 13 December 2005 21:02 (nineteen years ago)

Sounds like a pretty good idea for a safe, stable investment. That rate is better than most CD rates for a comparable time period.

― o. nate (onate), Tuesday, 13 December 2005 21:19 (nineteen years ago)

However, since it's a floating rate, there's the possibility it might decrease later.

― o. nate (onate), Tuesday, 13 December 2005 21:19 (nineteen years ago)

If you think inflation will hold steady or increase, it's a good investment.

― laurence kansas (lawrence kansas), Tuesday, 13 December 2005 21:27 (nineteen years ago)

Yeah, it doesn't take much capital to buy them... but would you be a little weirded out about having it exist soley in e-ville? I think I'd rather have paper, but that has perils too.

― andy --, Tuesday, 13 December 2005 21:32 (nineteen years ago)

The interest rate structure is 2-part: a lifetime fixed rate (1% for bonds purchased after Nov 1, 2005 until the new rate in May 2006) and then a variable rate tied to the consumer price index. You can't ever lose money on them, unlike stocks (unless the gov't goes bankrupt?), so very low risk. You do have to keep them for 5 years to not have any interest penalties at cash out.

― Jaq (Jaq), Tuesday, 13 December 2005 21:32 (nineteen years ago)

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