With the economy hitting a rough spot, everyone is wondering how they’re going to save money for the future and what they should invest their money in. With the stock market in turmoil, many investors have lost thousands of dollars which leaves everyone wondering where they should put their hard-earned cash. Savings bonds are one of the safest forms of investing you can participate in. Not only will you find purchasing savings bonds easy, you’ll find you don’t have to start out investing thousands of dollars to get started.
First of all, the general idea behind savings bonds is you are lending the government money and they are promising to return the money to you with interest. The savings bonds themselves are sponsored by the Treasury Department and come with a guarantee of payment. Short of the US Government going bankrupt, you can count on getting the return on your investment. Savings bonds can be redeemed after a six-month period, however, there is a five-year holding period that a penalty would be charged for cashing them in early. Generally, the penalty is approximately three months worth of interest.
Another reason for investing in savings bonds is how easy it is. Not only can you start out by investing only fifty-dollars, you can purchase the savings bonds at any bank or even online. Credit cards can also be used to purchase them. Some larger employers even offer monthly purchase plans where the pay is deducted from your check each week. For example, you may have one-quarter of a fifty-dollar savings bond taken out of your check each week.
There are two types of bonds you can purchase from the US Treasury. The Series I savings bonds offers a fixed percentage of interest. The interest owed is determined by the purchase date and gets adjusted according to inflation. The two combining factors will determine the amount owed when you cash it in.
The Series EE savings bond plan allows you to purchase a savings bond for half their value. In other words, you can pay twenty-five dollars for a fifty-dollar savings bond. However, in order to receive the fifty-dollars, you can not cash it in for seventeen years. This is way to invest money for your child’s college fund.
If you’re considering investing money to help secure you and your families future, investing in savings bonds is a smart choice. Not only are savings bonds guaranteed by the government, they’re easy to purchase and will help you to make money over a long period of time.
Other Articles
Understanding Convertible Bonds
Convertible bonds are a great way to receive a good rate of interest with the possibility of growth. Find out more about these hybred investments.
Understanding the Fundamentals of Common Stocks
Getting started in buying common stocks for growth can be a scary thought in today´s wacky markets. However, knowing the basics of stocks can be a real boost for the conservative investor.
How to Invest Profitably in Gold
Gold has been hitting record highs recently so investors have been grabbing gold bars and coins for profit. Is there a better way to buy gold? If so, what is it? Find out here