US Savings Bonds

Archive for the ‘US Savings Bonds’ Category

Question: What are the advantages and disadvantages of saving or investing in these?

What are the advantages and/or disadvantages of saving or investing in each of these:
-Common stocks
-Mutual Funds
-Life insurance
-A certificate of deposit
-A savings account of US savings bond

Answer: Stocks:
Advantages – potential for best gains.
Disadvantages – highest risk

Mutual Funds:
Advantages – Still high potential for gain with much less risk than single stock. With a single mutual fund you can have a very diversified portfolio.
Disadvantages – Expenses generally higher than stocks; many have minimum investment requirements.

Life insurance – in order to really consider this an investment, you would have to go with Whole life insurance. Term life pays nothing once you cancel the policy, so it’s not really an investment any more than Auto or homeowners insurance.
Advantages – Generally a safe investment
Disadvantages – Whole life policies can have expensive premiums; returns usually lower than Mutual Funds or stocks.

CDs:
Advantages – Most are federally insured up to a point. Make sure you get a CD that is FDIC insured (or NCUA insured if you get it from a credit union). Even if the bank becomes insolvent, your money, up to $250K, is federally insured.
Disadvantages – Low return; if you need to withdraw the money before the CD matures, there is usually a penalty – generally a few months worth of interest.

Savings Bonds:
Advantages: Backed by the full faith of the US government. Unless the US government dissolves, your money is safe.
Disadvantages – worst return. In fact, right now US bonds are yielding 0%. Even in good times, Savings Bonds offer very low interest generally.

Is it time to rebalance your portfolio? – Vanguard

Us Savings Bonds Faq. This section of Us Savings Bonds Information website contains many questions and answers on US Savings Bonds. 

Click on one of the links below to find the answer to each Us Savings Bonds Faq.

• How do I calculate what my US savings bond is worth today? Click here for Savings Bond Calculator.
• What are the interest rates on Series EE US Savings Bonds?
• How long must I hold a US Savings Bond?
• Does my US Savings Bond still earn interest?
• What do I do when my US Savings Bonds stop earning interests?
• Can Savings Bonds be cashed in tax-free for contribution to a qualified state tuition program (529 plan) or Education Savings Account?
• What is the value of the US Savings Bonds at the death of the US Savings Bonds owner? Does the beneficiary get a stepped-up cost basis when the US Savings Bond owner dies?
• What value should the executor of the estate use to value US Savings Bonds for estate tax purposes?
• What records should I keep of my Savings Bonds?
• What do I do if I bought a US savings bond at a financial institution but it never arrived?
• How do I replace a lost US savings bond?
• Do I need to change my name of the Us Savings Bonds after I married?
• If my name has changed due to divorce, do I need to have my Us Savings Bonds reissued?
• What if the address on the Us Savings Bonds are incorrect?
• What if the social security on the US savings bond is incorrect?
• Where and how can I buy United States savings bonds?