Ask:
Ok so my dd's both got a $50 US savings bond two years ago and I stuck them in a drawer and just now remembered that I had them. I never got one as a kid, so I have no idea what you do with them. Does anyone know or have any advice about this? Thanks.
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OK I think you have to hold them for 7 years and then they are face value kwim? Right now they are worth a little over 25.00. After face value then they just continue to collect interest. My dh got the website from the bank a while ago but I dont remember where he put the slip of paper. But I bet if you google it you will be able to read all about it. Good Luck
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You can redeem them after seven years for differing amounts. It depends what types of bonds they are, too. If they are EE, they will be worth about $30 or so now, give or take. If they are I, then they are probably worth about $55. (A $50 EE is purchased at $25 and a $50 I is purchased at $50.)
Since you have them in front of you, you can find out their value by going to . I keep ours in our safety deposit box.
If I were you, since they are not large amounts and they are so young, I would just put them away for the 30 years it takes to mature. They can be redeemed, but you have to pay taxes on the interest unless you use them for education. So, wait until they are in college, get them out and use them for books, tuition, or something like that. That way, they can claim them on their taxes and not have to pay tax on the interest. That's all on the website, too.
My Grandma bought me two EE bonds when I was a baby and one year old. I saved them until they completely matured and got $150 or so for each one. I don't really do it for my children, but we have been given many as gifts for them and are saving them until they mature or when they are in college - it all depends on the needs at the time.
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Thank you for the website I checked it out. I think I understand now. I thought I would be able to use them to start a savings account for each dd but I see what they are now. I will definetly be saving them now. Maybe they'll get more over the years. Seems like a good way to save since they earn more interest than a regular savings account.
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I've gotta be honest with you............. I had the ones that we "supposed to be done at 7 yrs as a kid. When we bought our first house I thought they'd be worth some thing.. Oh yeah, 2% interest is all you get per year. At 15 yrs I made face value of one and the others were a little bit more than what they were supposed to be bought for. Honestly I'd sock them into a CD but that's your choice.
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I agree with the PP, they really don't amount to much. My 23 year old nephew just cashed his, they really weren't worth all that much. There are better ways, like CDs, mutual funds, etc. to save for their futeure. My MIL did buy each of my kids one for Christmas, and ants to continue doing so. I guess we will have quite a few, but it is how she is choosing to do birthdays and holidays now, a toy and a bond. I also put ours in the safe deposit box.
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I got bonds twice a year from both grandparents from birth until age 18 so I know alot about them. Honestly they aren't what everyone things they are and are really a waste! It takes way too many years to actually get the value of them. I cashed mine in at 16 and learned that lesson, but they did help buy my car. But I got alot less than I was expecting. My kids got some when they were born, I have already told my grandparents I would rather have a check than a bond to put into their savings accounts. Plus we have moved alot so no telling how many I've lost by now. SO if I were you I would just cash them in now, take the $25 and put in their savings accounts!
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Seriously, I purchase US Savings Bonds all the time and love them. They are not my only investment vehicle but they are wonderful for the guaranteed rate of return and the locked-in feature. It isn't an investment that is easily liquidated which has some advantages.
Additionally, the US Savings Bonds of today aren't the same program from 20 years ago. The interest rate fluctuates now and you can roll EE bonds into more substantial US Treasury investments. There are also tax advantages at the time of redemption which a teenager might not appreciate when liquidating their bonds. I think they are a great way to encourage long term savings.
If you're still not thrilled with US Savings Bonds, you can ask grandma and grandpa to make a deposit in your little one's ShareBuilder account (there is a website) which would go toward a more agressive stock fund. It is very easy to open a custodial account for a child - or an account for yourself.
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When we bought our house last year we cashed in the $100 savings bond I had from when I was a baby - it was just shy of $500 so we were very happy with that. What was so neat was that we had forgotten that I had it so it was really "found" money. Not bad IMO
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You know, I agree with what everybody says about savings bonds not being the best investment.
BUT, I would rather grandparents, aunts, uncles, whomever, buy them bonds instead of silly toys year after year. They will remember that more in the long run than a toy they got when they were 2. So, I don't discourage it and, in fact, welcome it! I leave a note with each bond (we don't have that many really) telling the child who gave it to them and the circumstance. It was sort of hard for me to cash my grandmother's in because she gave it to me when I was 1 and when I was 30 (a year before I cashed it) she died. She truly loved me.
My husband's grandmother gave us a BUNCH of bonds that are in his and her name. Do I think that is the best investment? NO WAY! But, it was her way of giving something to my husband and, at the time, his future family (we hadn't even met yet - she gave them to us as a wedding present). Out of respect to her, we will not redeem them until she is gone. She may never know, but it somehow seems right to us.
So, don't go out and buy them, but keep them for your kids if they are given as presents. It means a lot to the giver sometimes. You have to remember the mentality of those that invest a lot in savings bonds. They were really big in the 40's and 50's so if your parents or grandparens are from that generation, they think they are great.
Think of it as found money in 30 years.