Loanio

Wondering Why You Should Invest in US Savings Bonds?

Are you wondering why you should invest in United States savings bonds, or how savings bonds work? This is a question that not enough people are considering these days, because most people are pressing their luck instead by gambling with stocks and other investments. So many people are turning to penny stocks thinking that they cannot lose, but this thrilling stock market is no way to turn a buck. Instead, people should look at savings bonds as a valuable part of an investment portfolio even if they do not appear to be as exciting as an investment.

First of all, you need to understand what a U.S. Savings Bond is if you want to take advantage of these lucrative investments. Back in the day, savings bonds were a popular form of long term investment for people who could not afford to buy common stock. This is back when a long term investment was only an investment that lasted longer than a couple of weeks. There are plenty of different savings bond options available to you out there, but the ones that are the best and the most worthy of your time are the ones that are backed by the United States. At their basic level, these savings bonds are a promise that if you lend money to the government, you will get it back with interest attached. The one risk lies in that the entity you lend to may not be able to pay it off as they have agreed to. However, when lending to the United States Government through US treasury bonds, the risk is a great deal less. Unless the entire American government goes bankrupt, you will eventually get your money back and you will earn interest in the process.

For all intents and purposes, you are lending money to the government when you purchase a United States savings bond. In the days of huge deficits, it is much easier for the United States government to raise money by selling US treasury bonds and savings bonds than to have to go to foreign lenders who require much larger interest rates and much higher returns on their investments. US treasury savings bonds are better for the government and the country because they do not require American citizens to pay taxes to pay foreign governments back for their loans.

Not only is this a lucrative deal for the government when it needs financial assistance, but because of compounding interest, it is also a lucrative deal for you. If you begin with a $1000 initial investment and make $50 monthly deposits, after taxes your nest egg would be nearly $20,000. Increase the interest rate by only a little bit to 3 percent and you will have a nest egg of $22,000 or more. If you think you can put away $100 a month instead of $50, your nest egg will grow exponentially to $42,000. There are also tax benefits associated with these bills that you will want to look into as well.

Photo Credits: 1

Originally posted 2008-11-26 05:01:05. Republished by Blog Post Promoter

• 3 Types of Safe Investments /caption] Given the shaky financial markets across the world today and the extreme ups and downs that are being seen from one day to the next in the US market, you might be wondering what are safe investments, and how can I be sure I won't lose all the money......
• Is Leasing an Auto a Good Option Right Now? [/caption] With the current state of the economy and rising interest rates, many are considering leasing an auto instead of making an outright purchase or financing one. While there are a few benefits that can come through a leased vehicle, this is a decision that will require some careful thought......
• How Do I Plan For Retirement Every working man and woman is entitled to a retirement that is secure and comfortable. Saving and planning for retirement is not necessarily an easy process however because we are living longer and healthier lives in general, which means we need more money to survive retirement than ever before. If......
• Do You Ask Yourself, How Do I Plan for Retirement? /caption] Don't you think that every working man and working woman is entitled to enjoying a secure and comfortable retirement once they are no longer working? Due to the fact that we have taken so many strides in health care and in medicine, many people are living longer and healthier......
• How Do Savings Bonds Work? /caption] Savings bonds are a major offering in credit unions and at banks. It is important to know what savings bonds are all about so that you can understand whether or not they will benefit you in any way. This page is going to take you through some of the......

• Money Saving Tips: 122 Ways To Trim Your Budget A while back All You Magazine offered to give away a few subscriptions to Frugal Dad readers.  The rules for entering the contest were simple--leave a money saving tip in the comments.  What happened next was one of those magical moments you can only get from blogs, and the sense......
• How to Legally Gamble Online in the United States (And For Free Too!) Texas Hold’em poker is one of the in things to do for young people right now. Thousands of college students play home games with their friends for relatively low amounts of money and even more gamble their savings away through online gambling, despite it’s illegality in the United States. Fortunately,......
• 95+ Money Saving Tips - From the readers! Last week I invited readers and bloggers alike to share (or blog) your favorite money saving tips.  I also threw in the added bonus that the most creative idea would receive a $25 Amazon.com gift card.  37 of you chimed in and shared more than 60 tips!  I really enjoyed......
• United States Commemorative Coins The United States Mint gains authorization from the United States Congress to produce what are known as commemorative coins, which are produced rather regularly throughout the years for a myriad of different purposes. These coins are produced to commemorate, to celebrate or to honor people, events, places and institutions for......
• Money Savings – Five Easy Ways to Pad Your Savings As you earn to manage your money, savings accounts have to play an important part in your financial plan. Having a well-stocked savings account will allow you to save for future goals as well as build an emergency fund to cushion you from life’s unexpected blows. Before you can reap......