I want to start getting them for my son, he's 3.
2007-01-22 04:16:33 · 4 answers · asked by Anonymous in Business & Finance ➔ Investing
Bonds are loans you make to the gov't or corporations.
Since you are talking about them for your son, I'm going to assume you are looking at US Savings Bonds, since they are guaranteed to be repaid. You can pick them up at almost any bank or directly from the US Treasury at the site I've linked to below.
My advice, would be to go with the Series I Bonds. They are guaranteed to beat inflation. The interest rate is adjusted every 6 months to make sure of this. When you buy them, you buy them at face value, so a $100 bond says $100 on it. Then the interest starts growing. Eventually, when you cash them in, the interest is calculated and you get the full redeemed amount.
Other gov't bonds have set terms, such as 5, 10 or 30 years. They pay you the interest every 6 months, and then you get your initial amount back at the end of the term.
2007-01-22 04:23:06 · answer #1 · answered by Uncle Pennybags 7 · 1⤊ 0⤋
Bonds are IOU issued by companies or governments. Please be warned that bonds are affected by inflation. The swing of interest rate might bring bonds price to fall drastically. Its up to you to choose which bonds you like. Normally companies which has lower credit rating gives higher returns. Actually I would suggest buying insurance for your son would be a better choice, as it can provide protection and the education savings for your son in the future. And of course will not be affected by the mood swing of the interest rates. Hope I answer to your question.
2007-01-22 12:59:09 · answer #2 · answered by Dang 3 · 0⤊ 0⤋
US Savings bonds are a poor investment to be avoided at all costs. Low interest & can be forgotten. If they are - no further interest. My grandparents suffered greatly from them. Get into a college 529 plan for son or oprn acct at schwab.com & build a growth future for him. Savings bonds & banks lose purchasing power vs taxes & inflation.
2007-01-22 13:01:53 · answer #3 · answered by vegas_iwish 5 · 0⤊ 0⤋
Rather than bonds you might want to check out a 529 college savings account - http://www.529s.com
The money saved in this account grows tax free and distributions used for college are also tax free.
2007-01-22 12:23:18 · answer #4 · answered by Anonymous · 0⤊ 0⤋