Savings bonds were traditionally viewed as a good way to set aside money for college or other long-term goals. Accessed April 6, 2020. But for anyone still asking, “Are savings bonds a good investment in 2016?” it might be worth knowing that the Treasury considers both EE and I Savings Bonds to be solid additions to your investment portfolio. Accessed April 6, 2020. At the end of 20 years, your savings will have grown to $32,071. But the HM Treasury-backed body also offers a number of other savings options. They work best if you have a definite savings goal – such as a future wedding or for your children’s higher education – because the money is effectively locked away until the term is over. Home REIT & Fixed Income Why Singapore Savings Bonds are no longer a good investment. When you buy a savings bond, the government pays a fixed interest rate on the bond and you can redeem it to recover the face value and collect your interest. What can you say about … Canada Savings Bonds: Still A Good Investment? U.S. Savings bonds are commonly given as birthday presents or other gifts for children. So, if you have a $200 bond, it was purchased for $100. Series I savings bonds are a good choice to protect your cash from inflation. The bank will also require at least one form of identification, although it may require two if you do not have an account there., If you have electronic bonds, you can cash them online through your TreasuryDirect account and have the amount credited to your checking or savings account. You can also convert your paper EE, E, or I bonds to electronic bonds through SmartExchange.. I will admit I have only recently looked at US Savings Bonds as an investment option. The U.S. Department of the Treasury issues savings bonds to help meet the government's financial needs. TreasuryDirect. Savings bonds were traditionally viewed as a good way to set aside money for college or other long-term goals. When you buy savings bonds you are essentially lending to the federal government, so you are guaranteed to get your money back unless the government fails. What Do I Need to Know About Step-Up Bonds? Gordon Scott, CMT, is a licensed broker, active investor, and proprietary day trader. REIT & Fixed Income; Why Singapore Savings Bonds are no longer a good investment. Keep Me Signed In What does "Remember Me" do? That was during an era when interest rates were much higher. I Bonds as a Safe Investment for Your Emergency Fund . Alternatives to Savings Bonds for Kids. How to Check or Calculate the Value of a Savings Bond Online, The Facts About Maryland's 529 College Savings Plans, Tax Advantages of Michigan's 529 Advisor College Savings Plan, Fiscal Service Announces New Savings Bonds Rates, Series I to Earn 2.22%, Series EE to Earn 0.10%, Series EE/E Savings Bonds Tax Considerations, Redeeming Paper Savings Bonds Under Special Circumstances, Cashing (Redeeming) EE and E Savings Bonds, Convert Your Paper Savings Bonds Using SmartExchange, Treasury Securities That Have Stopped Earning Interest. Accessed April 6, 2020. TreasuryDirect. Additionally, traditional savings accounts may offer more flexibility than a U.S. savings bond. Visit performance for information about the performance numbers displayed above. He has a Bachelor of Arts in economics from St. Olaf College. The government backs the repayment of the bonds, making them low risk for investors. "Certificates of Deposit (CDs)." NS&I Premium Bonds are a savings account you can put money into (and take out when you want), where the interest paid is decided by a monthly prize draw. The main advantage of savings bonds is that they are among the safest investments you can make. According to the Securities and Exchange Commission, savings bonds are backed by the "full faith and credit of the U.S. Savings bond interest is also exempt from state or local taxes and you don't have to pay federal taxes on a bond interest until you cash it in. They're second-tier because you can't sell them within the first 12 months of purchase, so you need other liquid funds to rely on while you build up a stash of I Bonds. The government tinkered with the interest rate formula, making them far less attractive as an investment by fixing rates for the life of the bond. "Mutual Funds." You may want to consider looking into CDs or annuities if you prefer more financially conservative investments. 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