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Savings-Bonds-Alert: Savings Bonds for grandchildren

Monday, February 28, 2005

Savings Bonds for grandchildren

I am a grandmother interested in buying savings bonds for my grandchildren. I am clueless and am wondering if this would be a better way for me to save. Right now I have a savings account at my bank for them, but it does not draw a lot of interest. Tom's response Savings Bonds would earn more interest than a Savings Account. However, every day I receive emails from people wanting to know if there's any way to replace Savings Bonds they received as children that have been misplaced. There is, but it's complicated and the additional interest you'd earn probably isn't worth the risk of total loss. The big attraction of Savings Bonds as gifts and prizes is that paper Series EE bonds can be purchased for half their face value (you pay $25 for a bond with a $50 face value). The face value of a Savings Bond is nearly meaningless, since the bond is always worth what you paid for it plus the interest it has earned. However, gift and prize givers like that they can give something that appears to be worth twice what they actually spent for it. If you're sure that you or your own kids can keep track of the Savings Bonds until your grandchildren are ready to cash them, you can purchase Series EE bonds at most banks. Go early and take your grandchild's social security number with you. The bank will take your money and you'll receive the bond in the mail in about three weeks.


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