US Savings Bonds

Posts Tagged ‘banking’

Question: Are US Series I Savings Bonds a Good Investment?

The IRS allows you to purchase them with your tax refund. Is this a good idea? What is current fixed rate? How is the 6 month inflation number calculated? It is from the CPI?

Answer: Gee Janice. You sure know how to get into the details. It is the CPI-U number published each month by the Federal Bureau of Labor Statistics. CPI-U means Consumer Price Index for Urban Consumers. The Fed usually defines Urban as all large cities plus SMSAs.. SMSA means Small Metroplolitan Statististical Areas. And that means urbanized cities with 50,000 population or more. Is it any wonder that people go nuts trying to understand this stuff.

Anyway. The Series I has two components – the fixed rate you know and the variable rate you should probably just google. If google does not cut it for you then here goes.

The November rate is based on the CPI-U for the previous March subtracted from the CPI-U for the previous September. That difference is then divided by the CPI-U for the previous March. If there is a March to September increase, then you get an increase. If it’s down, your rate goes down. This rate will now apply to bonds from November to April.

The May rate is based on the CPI-U for the previous September subtracted from the CPI-U for the previous March. That difference is then divided by the CPI-U for the previous September. And etc. per previous paragraph. This rate will now apply to bonds from May to October.

Right now I would say a good investment for staying safe and still having a shot at higher rates. Just my opinion on how I see the road ahead.

Professors Xiao, Huo on Current Economy 2/2

Question: US Savings Bonds OR COLLEGE 529 PLAN…WHATS BETTER FOR ME?

I’M ONLY GOING TO INVEST $50 MONTH FOR 16 YEARS. WHAT IS BETTER FOR ME? THANKS

Answer: right now a 529 might be better for you since college is a long way away for you. You will probably get a better return in the stock market since interest rates are so low now

Central Michigan Savings & Loans at Auto Body Credit Union

Question: Best way to set aside $1000 for each grandchild?

I just inherited a small amount of money, and want to set aside $1000 for each of my grandchildren. It must be done in some manner that their parents CAN NOT access the money, and the children can’t touch it until they are 18 if they go on to higher education or 21 if they don’t go to college or tech school. A ROTH IRA is out because they MUST go to college to get the money with that one. Naturally I want the money to have as high a return on the investment as possible, but I don’t want the kids to have to pay a bunch of tax when they cash it out. Someone suggested Savings Bonds, but those are something that can’t be restricted from being accessed by their parents or before the desired age. Suggestions???? What have YOU done?

Answer: Just set up a basic savings account in your name and the childs name and you can state that the child isn’t allowed to access the account (Tell them at the bank) until he/she is 18/21. This way the parents can’t touch the account, because their names aren’t on it. My grandparents did this for us. Call your local bank/credit union and check it out. This way it would be gaining interest until they reach the allotted age also.

National Economic Education Video Competition