Savings Bonds and why I can't stand them

[java]

1. What a pain to secure a tiny check for 20 years
2. in 10 years the bond has earned only $33

Am I missing the appeal of it? I was an investment banker. That kind of return is like watching paint dry for me. I'm cashing it out.

 

[nicolet]

Not only that you will pay taxes!

 

[billdob62]

Haven't even thought of those in years. Didn't these start back in WWII to help fund the war? I have only owned one in my life that I received as a kid but have no idea what ever happened to it.

 

[ICF]

1. What a pain to secure a tiny check for 20 years
2. in 10 years the bond has earned only $33

Am I missing the appeal of it? I was an investment banker. That kind of return is like watching paint dry for me. I'm cashing it out.

They were very good investments......20+ years ago, today not so much.

 

[blessedby3]

1. What a pain to secure a tiny check for 20 years
2. in 10 years the bond has earned only $33

Am I missing the appeal of it? I was an investment banker. That kind of return is like watching paint dry for me. I'm cashing it out.

Im right there with you! My MIL bought bonds for each of my kids...EVERY year until they hit 18. My dd22 still has bonds that have only earned dollars on them. We actually took them to the bank the other day and just left with them to put up again....to wait till they reach maturity! It is crazy to me, but she must think they are great. She told me the other day that she cant find anywhere to buy them anymore. (I was secretly jumping for joy!) I told her the kids were fine to get the $25 she would have paid for the bond

We are still watching the paint dry....BORING

 

[msmayor]

Though we haven't purchased bonds in a few years, the ones we do have are EXCELLENT investments right now for a safe steady return.

The bonds we own average a 4% return each year. That is far, far more than we can get in a cash account.

 

[NYCDiane]

1. You buy savings bonds through your (or any) bank. You don't have to "find a place to buy them")

2. You don't pay taxes on them when you cash them in.

3. Savings Bonds aren't meant to be purchased and cashed in a couple of years later. The typical savings bond has a 20 year maturity date and will stop increasing in value at that time (it says it right on the bond)

4. Savings Bonds are a GUARANTEED INVESTMENT, GUARANTEED TO DOUBLE YOUR MONEY --- a lot more than I can say for the stock market, 401k plan, IRAs or anything else. People usually buy them for a child at birth or christening or first birthday or even up to the child's 5th birthday as a gift for the future.

5. You can easily check the value of your bond by going to Bing or Google and typing in "what is my savings bond worth" and it will lead you to the .gov website where you can find out. You don't have to schlep into a bank to find out.

 

[disney1990]

My DD had bonds purchased for her when she was born and in the years after that. She is 27 and just bought a used car with her bonds. No place I know where you can earn the interest a bond pays.

 

[Mom_Rides]

1. You buy savings bonds through your (or any) bank. You don't have to "find a place to buy them")

2. You don't pay taxes on them when you cash them in.

3. Savings Bonds aren't meant to be purchased and cashed in a couple of years later. The typical savings bond has a 20 year maturity date and will stop increasing in value at that time (it says it right on the bond)

4. Savings Bonds are a GUARANTEED INVESTMENT, GUARANTEED TO DOUBLE YOUR MONEY --- a lot more than I can say for the stock market, 401k plan, IRAs or anything else. People usually buy them for a child at birth or christening or first birthday or even up to the child's 5th birthday as a gift for the future.

5. You can easily check the value of your bond by going to Bing or Google and typing in "what is my savings bond worth" and it will lead you to the .gov website where you can find out. You don't have to schlep into a bank to find out.

You CANNOT buy them through a bank any longer. Banks stopped selling them on Dec 31, 2011. You now have to open a Treasury Direct account through the Fed and your bonds are held in that account (paperless).

You DO have to pay taxes on the interest you earned on the bond ($10 and above will get you a 1099 from the bank).

It is very true that savings bonds often earn a better rate of interest then a cash account but they are not meant to be a short term investment.

 

[akcire]

1. What a pain to secure a tiny check for 20 years
2. in 10 years the bond has earned only $33

Am I missing the appeal of it? I was an investment banker. That kind of return is like watching paint dry for me. I'm cashing it out.

I have a ton of I bonds with a wonderful rate of return. If I average out the returns it is between 4-5% (Some years I bought the maximum resulting in a higher average rate). Also the maximum purchase used to be $30,000 and you could use a credit card. So I got lots of free flights with those savings bonds purchased. I was so sad when Treasury Direct stopped accepting credit cards, and even sadder whn they lowered their annual purchase limits.

With all the up's and downs in the stock market (other than a few individual stocks) the savings bonds have had a higher return. Sure I have had mutual funds return 12-17% one year, but then the next year they may have a negative or only a 1% gain.

The Treasury Direct website also allows you to buy lots of short term treasury investments. I know lots of people who buy and sell on a daily basis. I wish I could go back in time and buy MORE savings bonds.

It makes me laugh that I can get a mortgage for a lower percentage than I can earn on my bonds.

 

[poohbear2]

Do you have to pay taxes if you use them for your college education?

 

[nicolet]

You DO have to pay taxes on the interest you earned on the bond ($10 and above will get you a 1099 from the bank).

I had a savings bond from my grandmother and I paid a hefty amount in taxes for it!!!!
My mother was all about the savings bonds until I cashed that one in. She stopped buying them after that.

 

[momtosam]

The new savings bond online system is awful. I would suspect that the majority of bond purchasers are "older" (like grandparents who buy them for every birthday). I don't know how anyone is supposed to figure out how to use the online system./

 

[runwad]

Do you have to pay taxes if you use them for your college education?

Unless the rules have changed recently (?) no you don't pay taxes if you use them to pay for college.

 

[NYCDiane]

You CANNOT buy them through a bank any longer. Banks stopped selling them on Dec 31, 2011. You now have to open a Treasury Direct account through the Fed and your bonds are held in that account (paperless).

You DO have to pay taxes on the interest you earned on the bond ($10 and above will get you a 1099 from the bank).

It is very true that savings bonds often earn a better rate of interest then a cash account but they are not meant to be a short term investment.

News to me. My daughter is a teen so the Savings Bond days are over.

A 1099 for $10 interest? I would look into that.

Savings Bonds are not meant to be a short term investment and they never were. If you want a short term investment, throw your money at Wall Street and hope something good happens.

 

[Chelley00]

Why I hate them:

My uncle bought my son a decent amount in savings bond when he was born.

Uncle died and his wife swears she gave us the original. She did not. We have a paper that says "this is not the actual bond. You have to have the original". She can't even be bothered to possibly look for it. It would be nice to have it now that he's in college.

 

[NYCDiane]

Why I hate them:

My uncle bought my son a decent amount in savings bond when he was born.

Uncle died and his wife swears she gave us the original. She did not. We have a paper that says "this is not the actual bond. You have to have the original". She can't even be bothered to possibly look for it. It would be nice to have it now that he's in college.

You can contact the treasury dept and they will help you locate the bond information. You don't need the originals.

 

[tar heel]

My parents had two savings bonds in their safety deposit box when they died. I got a letter from the clerk of court two weeks ago that allows me to dispose of them. There's a $50 and a $100, so I was thinking they were worth $150. Turns out the $50 is worth about $72 and the $100 $76, or about $150!

So would y'all cash these in? Can I do it at the bank or did that also change at the end of last year? My intention had been to dispose of them b/c I'm trying to tie up all the lose ends in my parents' estate.

 

[NYCDiane]

They stop earning interest after a certain time. It gives the time on the face of the bond. If you're settling an estate and these bonds belong to the deceased only, you have to cash them in because they are an asset of the estate.

 

[LovinPooh]

My DS got a $100 bond as a reward at school last year. He thought it was like $100. Sadly when he asked when it woudl be worth $100 I couldnt tell him lol. I havent seen one in years lol