Questions about buying savings bonds for gifts

[mrsbornkuntry]

Let me start by saying that I'm not financially savvy at all. I have 4 children in my family that I don't live close to so I don't really know what toys they have or what they need and I was thinking about buying them savings bonds for Christmas next year. How difficult is this to do? I did some research online and it looks like I would want to buy EE bonds. Do I buy them and then transfer them to my name or can I put them in the children's names when I buy them? Is this a good way to help them save for the future? I don't think any of their parents have savings for them. Can I just buy them at a local bank? Would I need to have an account with them? I'm just lost here

 

[rie'smom]

My friend buys them at her bank. I believe the bonds are in her grandkids names.

 

[JoyG]

I have an aunt from out of town that gives each of my kids a $75 savings bond every Christmas. I think it's a wonderful idea. We've got quite a collection of them now. The first year, I believe she had to call me for their social security numbers. But since then she hasn't had to call back, they just come every year in the child's name, not mine.

She gets them from treasurydirect.gov and they get mailed directly to our house.

Joy

 

[jennifer293]

Yes you will want to get EE bonds, and you pay half the price that is on the bond (i.e. 50.00 bond is 25.00). To purchase these just go to your local bank and you will need the full name (first,middle,last) of each child with their social security number. MAKE SURE THE NAME AND THE SSN ARE CORRECT (it is a pain to fix afterwards and it must match their ID when they cash it in).

You can have it sent to your house or theirs!!!

My DD's have a quite a few over $1800 dollars worth that they have been getting since birth. They get them for b-days also!!

 

[TiggerStac]

Just a caution on savings bond...that I just found out (I work at a nursing home).....

Make sure that the savings bond is in the social security number of the person receiving it. I have a resident who's social was on some savings bonds that were bought for his grandson. The state counted these as assets of my resident (for medicaid eligibility purposes), as they are listed under his social security number, even though it was in the grandchilds name....it is recognized by the social security number.

Luckily there wasn't enough to put him over the eligibility limits, but you never know. My son a lot and if they were in anyone elses social, and this happened...it effect them.

 

[mrsbornkuntry]

Thanks for all of the replies, I had no idea that I would need their SSN, I didn't see that anywhere I read. You've all been so helpful, I think I will get them next year. I may do them for their birthdays, too.

 

[ThreeMusketeers]

I just wanted to put in my 2 cents on the subject...
My dd gets savings bonds from great grandma every year of about 50 bucks, sometimes they are more, but mostly every birthday and xmas they are 50 dollar bonds, while it is SO generous of her to think of DD, and I know that her heart is in the right place. (so don't get me wrong here.) I just wish she would put the cash in dd's bank account.

My reason's being that DH and I both had lots of savings bonds saved up from when we were children...we had been getting them since we were born, when we moved out of our parents houses, they gave them to us, and we went to cash them, while some of them ( very few) were worth full face value, some of them,..MOST of them weren't even near maturing, and it would have been another 10 years until they were worth $50. We ended up getting about $30 a peice for most of them. I just think for us anyway, it would have been less of a hassle..to have had the money put directly into an interest bearing savings account until we were reading to use it in the future.

 

[LisaR]

I just wanted to put in my 2 cents on the subject...
My dd gets savings bonds from great grandma every year of about 50 bucks, sometimes they are more, but mostly every birthday and xmas they are 50 dollar bonds, while it is SO generous of her to think of DD, and I know that her heart is in the right place. (so don't get me wrong here.) I just wish she would put the cash in dd's bank account.

My reason's being that DH and I both had lots of savings bonds saved up from when we were children...we had been getting them since we were born, when we moved out of our parents houses, they gave them to us, and we went to cash them, while some of them ( very few) were worth full face value, some of them,..MOST of them weren't even near maturing, and it would have been another 10 years until they were worth $50. We ended up getting about $30 a peice for most of them. I just think for us anyway, it would have been less of a hassle..to have had the money put directly into an interest bearing checking account until we were reading to use it in the future.

I am in agreement with you. My MIL does the same thing and while I am very appreciative and would never say anything to her, it just isn't the way I would "invest" my money.

DH and I did the same thing as you. We had a bunch of bonds and cashed them in. Most were still many, many years away from reaching maturity.

Lisa

 

[mrsbornkuntry]

The oldest two kids that I want to buy for don't have savings accts. Their parents are very far in debt and not trying to climb out. My thinking was that I could get the kids something for their future that their parents couldn't take or cash, as awful as that sounds. I really had to consider that at Christmas this year. The oldest is 13 and I wanted to get him a gift card, but I didn't want his dad to take it. I ended up going with an AMC card.

On the other hand, the other child will only be a year old next year so it sounds like I should get her something else in case her parents have started an acct. for her.

 

[ceecee]

My aunt purchased bonds for my 2 sisters and I. Of course mine matured and I cashed some in and I still have some. Mine were series EE, my sisters had some of the really old ones. I think it was very thoughtful of her to do this for us and the $ was not as easy to get at as some savings methods are, so we still all have the money. The CDs I had when I was younger I used when they matured (when you're young you would rather have stuff than money).

 

[my3kids]

My kids get them as gifts from 2 different relatives. One puts them in my kids names. The other puts them in our names as parents and says they shouldn't be in the children's names. Anyone know what the situation is with that?

 

[DisneyHumbug]

If the bond is in your name you can cash it in and use the proceeds for college tuition tax free (if you meet certain income limits). If the bond is in the child's name it must be considered their asset when you file the FAFSA (financial aid forms for college) and the child is expected to kick in a larger percentage of their own assets where the parents contribution is much less.

 

[summerrluvv]

For those that have bonds already, you can see how much they are worth here:

http://www.publicdebt.treas.gov/sav/savcalc.htm

 

[hmgolden]

I just wanted to put in my 2 cents on the subject...
My dd gets savings bonds from great grandma every year of about 50 bucks, sometimes they are more, but mostly every birthday and xmas they are 50 dollar bonds, while it is SO generous of her to think of DD, and I know that her heart is in the right place. (so don't get me wrong here.) I just wish she would put the cash in dd's bank account.

My reason's being that DH and I both had lots of savings bonds saved up from when we were children...we had been getting them since we were born, when we moved out of our parents houses, they gave them to us, and we went to cash them, while some of them ( very few) were worth full face value, some of them,..MOST of them weren't even near maturing, and it would have been another 10 years until they were worth $50. We ended up getting about $30 a peice for most of them. I just think for us anyway, it would have been less of a hassle..to have had the money put directly into an interest bearing savings account until we were reading to use it in the future.

I totally agree with you. DH has many 25, 50 and 100.00 savings bonds that were given to him from his great aunts when he was a child. We looked into cashing them in when we bought our condo to help with the down payment, but so many of them aren't even close to reaching maturity, we decided to wait until we really needed the money. Personally, I think it would have been much more useful to have had a savings account opened in his name that his aunts had contributed to instead.

 

[dvcgirl]

Let me start by saying that I'm not financially savvy at all. I have 4 children in my family that I don't live close to so I don't really know what toys they have or what they need and I was thinking about buying them savings bonds for Christmas next year. How difficult is this to do? I did some research online and it looks like I would want to buy EE bonds. Do I buy them and then transfer them to my name or can I put them in the children's names when I buy them? Is this a good way to help them save for the future? I don't think any of their parents have savings for them. Can I just buy them at a local bank? Would I need to have an account with them? I'm just lost here

Fiancial guru Clark Howard has been recommending that folks not buy EE bonds any longer....here's a blurb from a show I heard recently...when he says May...he means May of 2005.

"Clark has encouraged people for years to put money into U.S. savings bonds. For years, there was one kind of bond to buy – Series EE bonds. And then came the Series I bonds, which are “inflation adjusted” savings bonds. These pay you a guaranteed rate of interest, plus whatever the rate of inflation is. The EE bonds have been offering people a decent deal with a current rate of 3.25 percent. The I bonds are paying 3.67 percent. But things are about to change. With the next reset in May, traditional savings bonds are no longer going to earn “market interest rates.” Any EE bonds bought before the end of April will still qualify under the old system for up to 30 years. Those bought after that will earn under the new inferior system. The rationale is that the U.S. Treasury wants to offer more money to people who already have money and less money to those without it. So, the EE bonds are slowly going away. So, starting in May, you want to purchase I bonds only, not EE bonds. You human resources will be able to help you if you buy through work. The I bond rate changes every 6 months, and Clark will let you know soon whether they are a good idea to buy."

 

[Mom to 2]

I just cashed in a $50.00 savings bond from 1993 and it was worth $42.27. Found it in my bottom drawer and had forgot all about it!! Put the money in our savings account for our Disney trip in December. I agree if possible put it in a savings account instead.

Lory

 

[ThreeMusketeers]

What about you opening a savings account in each of the childrens names...then sending along a small box of candy or something with a note attached that says you have opened a savings account for x and put a little "starter" money in it. I don't know if at those ages the parents would probobly still have access to it. But Maybe not if it was your name attached with this childrens and not the parents. Then every bday or xmas you could contribute to the savings, it would earn interest in the childrens names..and when they are however old and you feel that they could be responsiable for it, you give them the savings book.

 

[summerrluvv]

What about you opening a savings account in each of the childrens names...then sending along a small box of candy or something with a note attached that says you have opened a savings account for x and put a little "starter" money in it. I don't know if at those ages the parents would probobly still have access to it. But Maybe not if it was your name attached with this childrens and not the parents. Then every bday or xmas you could contribute to the savings, it would earn interest in the childrens names..and when they are however old and you feel that they could be responsiable for it, you give them the savings book.

But then wouldn't the OP be resonsible for the taxes on it if the account earned interest?

 

[ThreeMusketeers]

???? Don't know the logistics. Was just a thought.

I assumed we were talking about $25 bucks or so here and there throughout the next 10 years or so..not thousands of dollars.

 

[nbodyhome]

I had been thinking about getting bonds for my nieces - I'll wait to see what Clark Howard says (I would have checked there first). They have SO much stuff, too many toys (so a Target 75% toy sale would have been lost on me!)

I don't want their parents to be able to cash them - just store them. The money would be for the kids, not the parents. Many of my cousins on my dads side received stocks and bonds and such when they were younger, as do their kids - which I think is much better than toys! I was given a bond as a kid, I wish I'd been given more - it'd be better than having more games and such stored in the closet. I think stocks, bonds, money, etc. from a family member - it's all good! (and of course, it's the thought that counts).

As far as a savings account - most of them making such little interest, I expect the bonds do much better. We are saving for a house, and I try to get the money into CD's as quick as I can after there is another $1000, because the savings is less than 1%, and the CD for a year now over 4%.

Denise