US Savings Bonds

Archive for February, 2008

Can US Savings Bonds be cashed in tax-free for contribution to a qualified state tuition program (529 plan) or Education Savings Account?

Yes.

If the owner of the US savings bond meets the requirements, he/she may redeem and deposit the proceeds into a 529 plan or an Education Savings Accounts (ESA) tax-free, subject to the normal contribution rules for these programs.

Unless the IRS provides further guidance, the redemption and deposit transactions should occur within the same calendar year to avoid reporting difficulties.

The owner is required to file Form 8815 to exclude the US Savings Bond interest from taxation.

Question: Are Us Savings Bond Return rates the same at all banks?

Does anything differ from buying a US Saving Bond at one place rather than at another?

Answer: The only thing that might differ is a ’service fee’ – but shouldn’t be an issue either. Savings Bonds are FEDERAL, so the interest rate is the same no matter where purchased. HTH!

JOHN WAYNE FOR US Savings Bonds

Question: Can anyone give me some info on saving money?

I am a teen wondering what the best way to save and invest money is. Should I get a savings bond, a CD, invest in the stock market, or what? I would appreciate info from anyone that has info on the subject.

Answer: It really depends on when and how you want access to the money.

Short term:
If you need access then a Savings account like www.emigrantdirect.com at 5.05% is a good place to start. Local bank savings will only be about 1 to 1.25% you would actually be losing money to inflation.

Mid term couple years:
CD’s are OK but your money is tied especially if you want to beat 5.05% it will be longer than a year more like two years. If you have to have super safe then this is OK.
Better with some risk would be ETF’s or no-load Mutual Funds, look for no load funds like Vanguard and being young go for 8 to 10% historical returns.

Long term 4+ years
US Savings Bonds, very secure but very long term with small return, may be 6% at best.
Being young again ETF’s and Mutual Funds are a better choice and since long term is the goal go for more risk like funds that have 10 to 15% historical returns, again no-load funds.

It’s good to start when you are young treat buying shares in an EFT or a mutual fund like buying stuff at the store. Think of them as stuff you want to buy like a new football, Shoes, stereo, etc… The difference between the Rich and the Poor is the rich buy assets and the poor buy liabilities.
For example

The poor spend $17 on a (music) CD that’s worth $3 as soon as you leave the store and you can’t give it a way 20 years later. – A liability

The rich spend $17 on a stock that pays a small dividend starting a $0.25 a year and in twenty years is worth $98 and pays $2.50 in dividends a year
- An asset

Savings Bonds 2-3% Daily Return On Your Money !!!!!!!!!!!!