Savings Smarts: US Savings Bonds
Treasury savings bonds have played a role in America’s economy for decades. Their role is growing again, as economy concerns find more Americans seeking safer investments.
And there aren’t many investments safer than a government backed bond. Bonds backed by the full faith of the US government will never decrease in value. A bond purchased for $1,000 will never be worth less than that, something that cannot be said about buying stock in a company.
Interest rates on bonds fluctuate, but always remain competitive. Bonds pay out more in interest than many savings accounts, and there are several options to maximize this profit. There are bonds which are guaranteed to double in value over a period of years; there are also bonds which have interest rates that adjust to compensate for inflation.
Bonds are also an intelligent choice because they offer tax breaks. Income tax isn’t calculated on the interest until the bond is cashed out. And some bonds aren’t taxed at all, if spent on education.
The Treasury Department now offers bonds electronically. Bonds are already easy to purchase at most banks and credit unions, and available through some employers as a company savings plan, and now individuals can also set up an online account for their bond purchases, and to monitor their savings.