What is a savings bond? And what do I do with it?

Question

My daughters grandma gave her a savings bond, my daughter is nine. It looks like a travellers check, but what do I do with it do I cash it? Iam clueless.

Answer 1

You don't cash it for years. It's a savings bond -- it will be worth the face value of the bond on the maturity date shown on the bond. You put them away in a safe place (mine are in a safety deposit box) until it's time to cash them in.

Bonds are backed by the US Government. For example: You can buy a $50 savings bond for $25. So your Mom gave the government $25 and in x number of years, the government will give your daughter $50.

It appears that many of the people who answered before me have never bought bonds, or at least not recently. LOL

Bonds purchased since 2003 mature in TWENTY YEARS. So be prepared to hang onto that bond for a long time.

Answer 2

Savings bonds are bought at banks. You pay half of the face value of the bond ($25 for a $50). It takes about 7 years for the bond to mature to face value. After that, you an continue to collect interst on the bond for 30 years. They are a nice investment if you don't need money right away. You can cash them in before they mature, but you pay a small penalty.

Answer 3

A savings bond provides the receiver with that amount of money after a certain period of time, and then it continues to accrue interest at a fairly high rate. The reason a purchaser might give one is that its initial cost is about half of the value on the bond.

Once it matures, you can take it to any bank and they will cash it for you. You can google "savings bonds" to find out the date of its maturity.

Answer 4

you have heard of stocks and bonds right?

this is a Bond, issued by the federal government. The bond is purchased at an ammount less than face value. After a certain number of years it has earned enough interst to be worth the face value. It will continue to accrue interest for a few more years and then it's done.

look them up on the us treasury site. Usually there is a period of time the bond has to be held before it can be cashed. Just put it away for your daughter and give it to her later.

Answer 5

You have to hold it until it matures. This takes up to 15 years depending on the type of bond it is (EE, etc.) If you try to cash it in before the time, you will not get the full amount of money. But it will continue to collect interest once it has matured. The best bet is to hold onto it for as long as you can.

Answer 6

bring it to a bank and cash it as long as you are listed on it. If not than the bank will give you a form to fill out. A lot of the paper bonds cannot be cashed until at least one year old treasurydirect.com gives all of the info for each type of bond

Answer 7

mark downs bonds are offered at banks. You pay 0.5 of the face value of the bond ($25 for a $50). It takes approximately 7 years for the bond to mature to stand value. After that, you an proceed to convey mutually interst on the bond for 30 years. they seem to be a effective investment in case you do no longer p.c. funds superb away. you may funds them in formerly they mature, yet you pay a small penalty.

Answer 8

Don't cash the bond! That's money for college, future, etc.

A bond is essentially a loan to the government or corporation on which you earn interest, and the issuer promises to pay you back in full by a certain date--known as the date of maturity.

Government bonds offer the greatest degree of security, as they are backed by the “full faith and credit” of the U.S. Government. It’s entirely unlikely the U.S. Government will default on repayment of this loan. If it does, your paltry bond will probably be the least of your worries.

Bonds are generally referred to as “fixed-income investments” because they make regular interest payments up until the date of maturity. The longer a bond’s maturity, the more its price will be affected by fluctuating interest rates. To compensate for the greater price risk, long-term bonds generally offer higher interest rates than intermediate or short-term bonds.

Over time, bonds have generally proven to provide higher returns than cash investments and to perform ahead of inflation.

Answer 9

It's very simple, companies issue shares or bonds,

- Bonds: sometimes the companies are in need for cash, so if they need $ 100,000, they issue 1,000 shares each of value $100, and they pay u interest annually

Answer 10

You hold it for a certain amount of time, usually 3-7 years, until it reaches its "maturity" date, then you cash it in. They are usually sold for 1/2 the price of its "mature" value.