Newspaper article The Christian Science Monitor

Added Features Make Savings Bonds Look Better

Newspaper article The Christian Science Monitor

Added Features Make Savings Bonds Look Better

Article excerpt

You probably got them from your grandparents on birthdays.

They carry George Washington's picture, and a patriotic pitch from Uncle Sam.

But does a gift to a kid make much sense as an investment for an adult? Many investment advisers say no. US savings bonds often get low marks for their low yield and complexity. Nonetheless, the bonds remain a staple for millions of Americans. They are safe, cheap, and free from state and local taxes. And the US Treasury has important changes in the works: inflation protection and the ability to buy them via computer. "Where else can a small saver get a tax-sheltered product for as little as $25" that is fully guaranteed by the US government and has no maintenance charge? asks Peter Hollenbach, a Treasury spokesman. By comparison, you must invest $1,000 or more to buy a long-term Treasury bond. Savings bonds are bought for half the face value, such as $25 for a $50 bond. The longer you wait to redeem them, the closer they get to the face value. "There is a strong case for buying savings bonds at the conservative end of the investment spectrum," says Daniel Pederson, a financial consultant specializing in savings bonds. Uncle Sam is now making it easier, with: * Inflation-indexed savings bonds. - Patterned after the new inflation-indexed Treasury securities, these bonds could arrive by January 1998. Your bond's principal would rise with inflation. Interest would come on top of that protected face value. Analysts say the Treasury may also allow the bonds to be used for individual retirement accounts. That is not possible today. * The "Savings Bond Wizard." This free computer program calculates your bond values. That's no easy task, since each bond has a shifting interest-rate mechanism. The program also lets you create a bond inventory. It's available by Internet at http://www. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.