Investors looking for low risk savings products that will provide a steady yield should look into government-backed series I savings bonds. Savings bonds can be used to finance a wide variety of expenses including saving up for retirement, paying for a wedding, private school tuition costs, college tuition costs, graduation or birthday gifts, medical or home care costs for seniors, as well as any number of other expensive events.
One of the basic benefits of investing in series I savings bonds is that they can provide a reliable, steady fixed rate of return that will offer security for the future. These are stress free investments since they are backed by the government and no worries are attached to how they will perform. Series I savings bonds perform steadily and consistently because that is how they are designed to perform.
Investors of government-backed bonds can determine the value of their investments simply by visiting the United States Savings bond website. This website offers a handy online bond calculator that can be used to automatically calculate the value of series I savings bonds as well as any other government-backed bonds. It only takes a few moments to put in the proper numbers in order to generate your current values for your bonds. Plus, it is possible to save this information for future use or to print it out in order to help you when filling out important forms such as the FAFSA or college financial aid forms.
With the dependable and stable rate of return that is attached to series I savings bonds, investors have an easy way to keep up with the value of their investment. Not only can they calculate the current worth of this type of investment, but also, they can plan ahead because they know exactly how much this type of investment will be worth once the bonds reach their full maturity.
Series I bonds can be purchased as electronic securities through TreasuryDirect, an online service. Electronically purchased bonds are bought at face value. For example, a $50 bond would be purchased at $50. Investors are limited to only $5,000 worth of electronic bond purchase per year.
Series I bonds that have been purchased as paper bonds can be converted to electronic securities through a special program that is referred to as SmartExchange. In order to do so, bond holders need to set up an online account. One of the benefits of doing this is that bond holders no longer have to worry about the safekeeping of their investment as it is held electronically through the Treasury.
However, it is still possible to purchase paper versions of bonds. Only one half of the face value of the bond must be paid upfront when purchasing paper bonds. Typically, these are mailed to the investor within a few weeks. They can also be sent to an alternative address such as a grandchild’s or sibling’s address.
Many financial institutions such as a banks and credit unions are set up to sell government-backed savings bonds to their customers. Additionally, for some investors, the opportunity exists to purchase series I savings bonds through their employers and an easy-to-use payroll deduction plan.
Investing in series I savings bonds is an easy way to save for all types of expenses. However, with this type of investment, a waiting period exists for each bond as it matures. Once the bond matures to its full value, it can be cashed in without incurring an early withdrawal penalty. If the bond holder redeems it before it matures, then he forfeits the last three months of interest earned on the bond. Bonds are only sold in multiples of $25. Common face values for series I savings bonds include $50, $75, $100, $200, $500, $1000, $5000, and $10,000.
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