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Anne Lee
11-23-11, 1:52pm
I have a few savings bonds. I planned to be the savings bond grandma, assuming my children ever have children.


Buying A Savings Bond Is About To Get Harder (http://www.npr.org/blogs/money/2011/11/21/142419887/buying-a-savings-bond-is-about-to-get-harder?sc=nl&cc=pmb-20111122)
Paper savings bonds used to be a wholesome part of American culture. You bought them when your kids were born, to save for college. You bought them to save for a home.

But starting next month, they'll be a lot harder to get. Banks will stop selling paper savings bonds on January 1, 2012.

Here's the way savings bonds used to work — you would go to the bank, plunk down some money, and get a certificate — a paper pledge that the U.S. government will pay back all your money, plus interest. After a set number of years, you'd take your paper bond to the bank and cash it in. The wait was worth it: a $50 savings bond bought in 1975 was worth over $250 dollars thirty years later.


"We sold billions and billions dollars of savings bonds over the years," explains Mckayla Braden, who works for the Treasury Department. She says savings bonds got their start back in the mid-1930s. The government was expanding its size, launching a range of programs like the WPA, and it needed funds.

Read more: http://www.npr.org/blogs/money/2011/11/21/142419887/buying-a-savings-bond-is-about-to-get-harder?sc=nl&cc=pmb-20111122

ctg492
11-23-11, 2:02pm
Nice of you.
I tried to be the saving bond Mom. All were spent on silly stuff before they turned 19 :( Guess they did not see the value like I did.

Miss Cellane
11-23-11, 4:40pm
While they are moving to paperless Savings Bonds, you can still buy the electronic version. The Savings Bond website has gift certificates that you can fill out and print to have something to give to the kids.

Given that so many financial transactions are done electronically now, this is simply the government keeping up with the times.

CathyA
11-23-11, 5:50pm
My kids both received several thousand dollars in savings bonds when they were little. I didn't let them cash them until they were like 21-24. They came in very handy for college.
At this point in history, I would be afraid the U.S. gov't. might default on them. :(

Anne Lee
11-23-11, 6:08pm
I didn't know that about the certificates. I've bought bonds via Treasury Direct for a while now. The rate for I bonds now is rather quite bad but it's something I keep an eye on.

Rogar
11-23-11, 10:51pm
Call me old fashioned, but I have liked holding a paper savings bond in hand. I have a small collection of I-bonds issued in the day when the real rate was 1% or a little higher. They are snuggled safely in my safety deposit box. Even at the current real rate of 0%, they will at least keep up with inflation, which I anticipate to be better than going 5 year CD rates.

I suppose nothing is risk free, but I consider the solvency of the US government to offer less risk than most everything else. I'm less certain about the security and integrity of investing electronically.

frugal-one
11-24-11, 2:54pm
I just bought I Bonds and it said the rate was 4.6%. I have I Bonds from the early 2000s that are earning close to 9%. ????

mira
11-24-11, 6:09pm
My grandmom used to send me paper savings bonds every year; sometimes more often. If I want to 'cash' them, I'll have to go down to the US Embassy in London then send them to Washington or something. My my.

Anne Lee
11-24-11, 8:43pm
Frugal-one really? Sweet! Obviously my info was wrong.

Rogar
11-24-11, 10:55pm
I-bonds combine the fixed rate at which the bond was issued and is constant for the life of the bond, plus the inflation rate, which is recalculated every six months, for a total rate of return. It gets slightly complicated, but the US Treasury site has a decent explanation.
http://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm

Those older bonds issued in the early 2000s are a real deal right now and something to hang on to.

ApatheticNoMore
12-1-11, 3:32am
I-bonds were a pretty good deal recently as well, were 4% now have fallen to 3%. That's just the inflation component so you are technically just keeping even with inflation (by the government's measure), but really you can't get this type of rate elsewhere with no risk to principle and without being an investing expert.

I prefer paper too. It feels more real somehow.