savings bonds?

[Dutch445]

with a new granddaughter in the family having her Christening
this weekend a few of our family members were going to do the ol
savings bond gift.
as it turns out, the procedure has been govorn"mental"ized,
and it looks like we may just give cash instead.

has anybody gone thru the hoops to actually do this?

for anyone that hasn't looked into it lately, it requires setting up
a "treasury" bank account , then use that account to purchase the bond,
once you have the bond for 5 days, you can then transfer to the
recipient's "treasury" account. yup, this 3 mo old girl would require an
account set up in her name.... all before you can even print off
the "gift certificate" to give to the family.
unless i read their tutorial wrong, it just seems like it would deter
anybody from doing this.....

 

[smstonypoint]

First, congratulations to "Gramps."

Have the parents thought about setting up a 529 plan for their daughter? You could give cash/checks to the parents, who would then deposit the funds into the 529 account. They could invest in mutual funds within the account and likely achieve much higher returns than with savings bonds (EE or I). There are also tax advantages. See What Is a 529 Plan? and http://www.savingforcollege.com/grandparents/answer.php?grandparent_faq_id=2.

Steve

 

[Dutch445]

Steve that's a good question. Maybe at the party Sunday after the service
we'll have a chat about that. good idea

thanks

 

[bigtiller]

I think it was Clark Howard on HLN news that said, if $5000 were invested in the mutual funds at birth, that child could retire a millionaire. I have been patently waiting for a chance to do that but no grand kids yet. Lucky you, congratulations!!

 

[MossRoad]

First, congratulations to "Gramps."

Have the parents thought about setting up a 529 plan for their daughter? You could give cash/checks to the parents, who would then deposit the funds into the 529 account. They could invest in mutual funds within the account and likely achieve much higher returns than with savings bonds (EE or I). There are also tax advantages. See What Is a 529 Plan? and Grandparents Faqs on 529s - College Savings for Grandchildren.

Steve

Great advice. A 529 will yield a lot more money towards a college education for the child than savings bonds. We have two children. We didn't start the 529s until the 2nd one was born. Wish we would have sooner for the first one. Anyhow, $20 per week into a 529 = $1000 per year x 18 years = $18,000 towards college BEFORE you start figuring the interest in the investments in mutual funds. At 8% rate of return you could end up with over $40,000 by the time the child reaches 18. That may not seem like much in the future, but its more than you'll get in savings bonds.

 

[Soundguy]

i used to buy SB's have quite a few.. but if it is that hard to buy now.. I'll pass.

 

[smstonypoint]

Anyhow, $20 per week into a 529 = $1000 per year x 18 years = $18,000 towards college BEFORE you start figuring the interest in the investments in mutual funds. At 8% rate of return you could end up with over $40,000 by the time the child reaches 18. That may not seem like much in the future, but its more than you'll get in savings bonds.

Close enough for government work -- I came up with $41,808.36 from investing $20/week for 18 years (52 weeks/year) at an annual rate of 8% with weekly compounding.

BTW, the estimated cost of attending Harvard in 2013/14 is $59,950 - $65,150 (https://college.harvard.edu/financial-aid/how-aid-works/cost-attendance). I'm going out on a limb and predict that cost is going to be higher 18 years from now. You had better bump that $20 up a smidgen.

Steve

 

[Soundguy]

and hope you can get near 8%...

 

[Fossil Farm]

Yep, no more paper bonds. They are now paperless through TreasuryDirect. One has to setup an account on the website to purchase them now. The rate through May 2014 is 0.10 percent. I bonds are a better "deal" at 1.38 percent. Rates are set in May and November. Cash or 529 plan would be better. Something that is harder for the government to trace that she won't have to file paperwork on at some point in her life. We've been giving silver coins from Canada or Australia with animals on them just for something for them to look at and feel. Maybe they will get interested in coin collecting at some point. They can always be cashed in with no paper trail.

 

[nc redneck]

The only way to get old time paper I Bonds is through your tax return. I do it every year as paper I bonds are backed buy the US Treasury . Read the fine print on savings bonds online. They don't pay much and I only put a few thousand into them each year. I wish I had more of the $5000.00 one I bought back in 1998 and are paying 5% today. Good Luck