Investing is kind of like eating out. You've got to be careful about what you order. Stocks may be a bit spicy, a bank savings account too bland. Ready to sample something a little different?
You might want to have a new look at an old recipe: U.S. Savings Bonds. They're as safe as any bank because they're fully backed by Uncle Sam, and that's just one of the tasty ingredients of savings bonds.
Advantages of Savings Bonds
Besides being no-risk, U.S. Savings bonds:
And if you're searching high and low but coming up empty for that one particular Spiderman toy, think bonds. Bonds as gifts come complete with customized and printable certificates.
Disadvantage: Wading Through Alphabet Soup
So savings bonds can be a good ingredient in your menu of investments. Only one drawback, you're going to have to wade through a bit of alphabet soup to understand the various types. You've got HH, EE and the newest, I Bonds. For our purposes here, we're talking only about the EE and I series.
The EE and the Series I are pretty much alike. They both:
So if these things are so alike, how are they different? Well, one difference is that EE's have a $25 purchase minimum and the purchase minimum for I's is $50. But the real difference is how Uncle Sam arrives at the interest he pays.
EE's pay 90 percent of the average rate that five-year Treasuries have been paying for the prior six months. I's pay whatever the inflation rate is, plus two percent.
Don't sweat which to buy too much--either will work just fine. Check the rates and decide.
So, if you're waiting for that bull to tear down walls and gore the bear, then earning sure and safe money on your money doesn't get much better than this.