What are the advantages of savings bonds?

Answer 1

Savings bonds are guaranteed by the full faith and credit of the United States Government. The interest you receive on a US Savings Bond is state and local tax free. Savings bonds are registered to the owner and therefore cannot be lost or stolen.

For more information: http://invest-faq.com/cbc/bonds-us-savings.html

Best Regards,

Docmase

Answer 2

There are a couple. 1. They accumulate interest tax deferred. Most bonds do not. 2. They are available in small denominations. 3. There are two versions you can choose from a. EE/E bonds and b. I bonds. 4. interest is not subject to state and local taxes. 5. if used to pay for post-secondary educational expenses, the interest might be tax free.

Interestingly, why did you not ask about the disadvantages?

I will address the disadvantage anyway. Low rate of interest. Currently at 3.0% Inflation is running at a greater rate than that. So in effect you are paying the U S government to use your money.

Answer 3

You don't have to pay any tax on the interest until you cash in the bond.
Convenient payroll deduction, it is easier for most people to save if they never see the money.

Disadvantages,
most credit union won't cash them, it usually has to be a bank.
If you don't have an account at the bank they limit how much you can cash at one time something like $500-$1000 per transaction. However check your credit cards, if your credit card is maintained by B of A or Chase that is considered an account and they will cash as many as you want.
taxes are not deducted when you cash them make sure you account for that at tax time so you have the extra money to pay the taxes.

Answer 4

From an investment stand point there are actually no advantages. Your money invested in a savings bond will not grow at a rate high enough to out pace inflation and the taxes you will eventually pay. There is no true real growth of your money. Investing in stock mutual funds is a more prudent way to save for future goals. Please read my profile.

Answer 5

Easy to purchase. You can do it online now at savingsbonds.org. The safest instrument on earth. Only if the U.S. Gov't falls, will you lose money. Easy to sell also, either online or at your bank, with no fees attached.
The downside are they don't pay much interest, you must hold them many years til maturity, although you can cash them in earlier, but lose a month(or maybe a 3 month period) of interest. Don't use money you might need when purchasing these bonds.
Great for young children for when they grow up, they have something. Also State tax exempt.

Answer 6

Safety. Easy to buy. No state income tax on earnings.

Answer 7

low inventment cost -- safe and secure!!!!