For decades the savings bond was the gift you knew would last past the year. That was the idea. It was the easiest way to gift money that would grow over time.
A Little History
The bulk of the savings bonds I got as a kid happened before I was teenager. I may have received some for eighth grade graduation, since all those bonds were earmarked for college. A savings bond gift with 4 years to go was a wise and safe investment. In the end, I had enough to buy a semester of books and a few late night pizzas – which was the point. Looking back, you have to wonder what that money would have grown to under a solid investment plan. And how many more pizzas I could have purchased as I studied for exams.
I can’t complain too much. The rates on those savings bonds were great compared to the interest rates we have today. Back then, there really wasn’t any other option either. You couldn’t open a brokerage account with $25, $50 or $100. That would barely cover the brokerage fees. The internet didn’t even exist yet. Discount brokers hadn’t been invented. Those two missing pieces would eventually bring investing to the masses. The low-cost transaction fees and easy account access of today almost makes the savings bond a thing of the past. Continue Reading…
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