Convert Tax Refund into Savings Bonds

[LuxLiving]

H&R Block to test market putting your tax refund into savings bonds...

H&R Block to test market putting tax refunds into Savings Bonds: US Savings Bonds

Would you be interested?

[PRICEPLUS]

It does present an interesting option!

[poundwise]

Savings bonds are lousy investments. So, no, I would not be interested.

[disneysteve]

Savings bonds are lousy investments.

They are far better investments than a shopping spree at the mall, a pricey vacation, a new flat screen TV or all the other things that so many people blow their refunds on.

[sweeps]

If you could buy the savings bonds at a discount, then I might be interested. (I think H&R Block allows you to buy gift cards at certain merchants at a discount.) But otherwise, I agree with poundwise, there are better investments. (Or of course, avoid the tax refund in the first place.)

[disneysteve]

Oh, I agree completely that they aren't the best investments, but think about the people who this offer is aimed at. These are probably mostly people who aren't currently saving at all. Someone who is an active saver most likely wouldn't be interested, but I think it could be a great way to get non-savers to start putting some money away.

Hey, I think this is a whole lot better idea than the scratch and win game that H&R advertises when you come to do your taxes.

[teddrill]

You barely cover inflation with a savings bond. Why not help people start a savings that they could keep adding too and would actually grow a little. my 2¢

[jmerinka7]

What is the better way for the saving.

[disneysteve]

You barely cover inflation with a savings bond. Why not help people start a savings that they could keep adding too and would actually grow a little. my 2¢

I think that sounds good in theory. In reality, though, I think a program like this would have to stick to some type of government security. If they pushed any private investment - stock, mutual fund, money market account, etc. - they'd be promoting a particular company (most likely their own) which would really be unethical.

Another advantage of savings bonds is that they aren't totally liquid. There is an interest penalty for cashing them out before 5 years so there is an incentive to stick with them for at least that long. That could encourage people to stay on track.

This is absolutely not a perfect plan and not one that most of us who are more knowledgeable would choose to participate in, but for someone who has zero savings, it really isn't such a bad place to start.

[tabbycat31]

Oh, I agree completely that they aren't the best investments, but think about the people who this offer is aimed at. These are probably mostly people who aren't currently saving at all. Someone who is an active saver most likely wouldn't be interested, but I think it could be a great way to get non-savers to start putting some money away.

Hey, I think this is a whole lot better idea than the scratch and win game that H&R advertises when you come to do your taxes.

The scratch and win game is given to every client..... and it's goal is to make doing your taxes a little fun. So far the only prizes my clients have won have been $5 Subway gift cards (hey it's lunch).

[Aleta]

I bought savings bonds years ago when my kids were young. I did it by rolling pennies. My one sons bond is worth almost $1,000.00 today and I only invested around $206.75. They grew tax deferred.

It's an easy way for someone to save on a smaller scale when some don't have thousands of dollars to open a mutual fund. You can buy them as you have saved the money. I think there's a place for them.

When the banks were giving .75 in the money markets, our bonds were making over 4%.

[disneysteve]

My one sons bond is worth almost $1,000.00 today and I only invested around $206.75.

Those numbers sound a little odd. At 4%, it would take over 40 years for $200 to grow to $1000.

[Aleta]

Back when I bought them, the interest was pretty high and the bonds grew faster. There was a time when people were earning 14% and above in money markets. So, it isn't hard to imagine it.