US Savings Bonds

Question: savings bond question?

I dont understand the concept of a savings bond. I was given $100 to buy a bond for my daughter. I know I could either get one in the bank or online directly from the US Treasury. But how much could this bond be worth in 17 years? Would it be substantial? I did the calculator feature on the website and it said at a 2% interest it would increase $46 in 10 years. Is that it? I thought it would be more. Also what is the difference between type 1 and type ee? Thanks in advance!

Answer: Savings Bonds are good and bad.

They are a neat way to get people to save. E-Bonds are for education.

However, they are at a set interest rate of gains and they only gain for a set period of time.

If your daughter is going to be 18 and going to college in 17 years, then you may want to keep it to pay tuition.

If you are going to keep them longer… cash them out after a couple years and invest the money into a long term Mutual Fund or other Growth fund you feel confident in.

Never mind the “Face Value” of these bonds… they cost only $50 at the time of purchase and only gain value over time… very little over a long time.

Good Questions, I hope this helps.

Good Luck!

US Savings Bonds ad with Rube Goldberg device