Are I bonds a good investment?

Question

I have about $1400 dollars worth of I bonds. I am thinking maybe this is not such a good idea. Will they be worth anything in 15 yrs?

Answer 1

The answer to your question depends on a couple of factors, such as your age now and how much risk your willing to accept. In turn one would need to know where you want to be "financially" in the future.

Aside from the above, bonds are generally a safe and secure investment if you have a "very" low tolerance for risk. To compensate for the low risk bonds, bonds (other than Junk Bonds), usually offer a lower rate of interest than more aggressive, and riskier investments such as stocks.

Answer 2

As far as government bonds go they are the best and right now are about equal to the average junk bond. The government thinks these bonds are the best too and that's why there is a cap to the amount you can purchase per year. Because of inflation, plus taxes, your I-bonds aren't really an investment as preservation of worth. Hiding your money in a matress or in a bank is a good way to lose worth. Putting $500 in the bank in 1930 (the amount that could have bought you a new car) would probably have gained you less than $5,000 today (which would have bought you an ok used car). If you had stuffed that $500 in a matress it would still be worth $500 (which might not pay a months worth of rent). If I-bonds were possible back then, your $500 probably would allow you to buy a new car today.

Answer 3

Tim C, he said they were I-bonds. Those are inflation-indexed savings bonds. No risk, completely safe.

But to answer the question, I-bonds have two components to them. The fixed component, which remains the same for the life of the bonds, and the inflation component, which is adjusted every 6 months. Whether they're a good idea or not depends on when you bought them and what rate the fixed component your particular I-bonds have. For example, when I bought mine, the fixed rate was 3%, which, when added to the inflation component, gives me a total return of 6.12% right now . THAT is a good deal. If you bought yours since November, you'll have a fixed rate of 1.4%. So you'll always get 1.4% better than the inflation rate. Not quite so spectacular, but better than EE bonds. If you're already invested in the stock market, there's nothing wrong with having some money in I-bonds. If not, I would consider investing in a mutual fund, index fund, or ETF. You'll get a much better return over the long haul.

Answer 4

You do not say what kind of bonds they are. You need to consider the bond issuer (corporate, municipal, treasury), the maturity, and when you will need the money and what you plan to do with it. Bonds are not always completely safe. With bonds you have:
Default risk - none for government bonds, high for junk (high yield)
Interest rate risk - Rising rates will make your bonds worth less if you sell them before maturity.
Inflation risk - The $1400 you get in the future may not buy as much as $1400 does now.

Answer 5

About these bonds are these from a resourceful place of business..Other than maybe the city or town you live in. Have you checked in the newspaper or the Internet to see if you have gains or loss in profits.
Yes! 15 years does sound like a sound investment but do the math.. check out and see what is going on with your Bonds..

Answer 6

Good investment, quite safe. They earn interest for as long as 30 years. See this good article from a government source:

http://www.publicdebt.treas.gov/com/comi1105.htm

I would not sell them, they are good and guarantee a rate of return above the inflation, so the real purchasing power will not decrease if the inflation rate increases.

When you have more money to invest, you should consider top performing mutual funds. See my source listed below for great investing information.

Answer 7

I Bonds are a low-risk, liquid savings product. While you own them they earn interest and protect you from inflation. You may purchase I Bonds via TreasuryDirect, at most local financial institutions or through payroll deduction. As a TreasuryDirect account holder, you can purchase, manage, and redeem I Bonds directly from your Web browser.

Answer 8

the two best hazards in bonds are default danger and activity value danger. If costs of activity upward push, the marketplace value of an latest bond will oftentimes fall. in case you own man or woman bonds and intend to hold them to adulthood, that's no longer a brilliant deal - then you definately purely would desire to be bothered approximately default danger. in case you would be able to desire to sell them, that's a significant deal. Bonds are oftentimes safer than shares. yet critical isn't "assured" neither is marketplace loss via different components like growing to be costs of activity, distant places money costs, and so on. once you purchase bond mutual fund shares, you genuinely replace into section proprietor of a basket of bonds. returned, growing to be costs of activity would reason the marketplace value of that basket to fall. Bond fund managers attempt to "hedge" against that danger via stunning the adulthood dates of the bonds held via the fund. long-term bonds are greater comfortable to risking costs of activity than short term bonds. in case you assume growing to be hobbies, usual understanding says to adhere with short term bonds (or bond money) and stay removed from the long term matters.