Savings Bonds

[genchan]

I was reading the news that savings bonds will now be fixed rate instead of adjustable. I understand that right now they aren't going to be a good investment with interest rates rising. But how about when interest rates peak again. Since they won't be adjusted, then you could lock in that rate for the whole time or am I missing something.

Does anyone have savings bonds right now and how do you feel about the changes?

[ducati]

My parents used savings bonds to pay for a portion of my education as well as my brother. In my opinion, savings bonds are not the greatest means of accumulating wealth. That's not to say a diversified asset allocation is a bad thing, but I certainly would not rely on this as a primary means of investment.

To answer your question about locking in the rate, it is much like any other investment. Timing is everything. You might lock in at a rate and discover the rate advances another percentage point.

[baselle]

I have a small portfolio of I-bonds that I buy once a month every month at the end of the month. There are some great things about them, but they are lot trickier than an ING account

Here's a good reference: http://www.savings-bonds-alert.com/

[PRICEPLUS]

I think they are a good part of a diversified portfolio. The fact that the interest is tax free for tuition(college) is really helpful.

[byusteeler]

I have savings bonds that my work gave for not using sick leave. I really don't know much about them. They are from 2000 and 2001. The face says $100 but I think they are actually originally $50. So how does it work? At what point do they become worth $100? I took a furlough from my company for 3 years and am just going back. The company has been in bankruptcy for a few years and no longer gives incentives for not using sick leave. So These will probably be the only 2 I have to worry about.

[baselle]

Depends on whether they're EE or I. Here's a place where you can price your savings bonds -
http://www.savings-bonds-alert.com/s...ond-value.html You can also download the savings bond wizard

If you choose to redeem them, most decent banks should be able to do the job. Try to find a older teller - you're less likely to get a confused look.

If you plan on using savings bonds for education - remember that its for qualified expenses (books, tuition yes; pizza party, spending money no), so the clever thing to do is purchase a mix of denominations, including many small ones. That way when it comes time to redeem, you can redeem exactly what you need, and no more.

[byusteeler]

Thanks baselle. I found that sight helpful. Just fyi they are EE.