posted: Apr. 23, 2002 @ 9:31p
Here, I'd like to focus on using savings bonds as an investment...in particular, to replace the conventional "cash" and/or fixed income component of one's investment portfolio.
I've compiled a web page on the subject which I hope some of you will find useful at http://www.dhanson.net/ibonds.htm. Perhaps it can focus our discussion. It contains reasons why I'm sold on savings bonds as investment.
I'm hoping to update this page with suggestions from all of you. My goal is to be able to refer friends and relatives (including investment novices) to it when I'm asked why I like savings bonds.
Questions to start us off:
-Do you agree or disagree with my assessment?
-What would you add as other features of savings bonds worthy of comment?
-How are you using savings bonds in your invesment portfolio?
-What other questions do you consider worth focusing on in this thread?
As of October 2005, savings bonds are the subject of renewed interest at FW finance and elsewhere, as changes in the CPI have made them relatively attractive holdings. For questions specific to strategies of short-term holding of savings bonds in this late 05-2006 environment, see xerty's well thought-out strategy thread here .
It's been a long time since this thread (or my web page) has had a major update. Please offer suggestions for making the OP more useful, and I'll do my best to oblige.
TIA for your thoughts, Dave
NOTE: originally, this thread was a companion to this thread here , which did a fine job of discussing the technique of buying savings bonds for purposes of accruing credit card rewards. But as of 12/31/03, savings bonds can no longer be purchased with a credit card, making the bulk of this discussion obsolete.
Update 8/28/02: August bonds can be ordered through 8/29/02 through 11:59 pm Eastern time.
Go to https://wwws.publicdebt.treas.gov/SD/SBDHome?PROC=SBDHome&button.x=82&button.y=8 for the info.
Update 5/03/02: EE Patriot bonds are now a better deal short term, earning 3.96% vs the 2.57% i-bond return
Update 11/01/02: Once again, i-bonds are a better deal for most buyers, thanks to the increase in the inflation component of i-bonds.
Update 1/15/03: Bonds issued 2/1/03 or later must be held for a minimum of 12 months US Treasury press release on this is here
Update 6/29/03: Last day to buy June bonds is Sunday June 29. Note that terms have changed to allow for purchases of $30K in each of 4 categories per SS#: i-bonds, electronic i-bonds, EE bonds, and electronic EE bonds.
Update 11/13/03: As of November 1, EE Bonds are paying 2.61% ; I Bonds 2.19%.
Update 01/03/04: Purchase of bonds with a credit card officially ended as of 12/31. There are still excellent reasons to buy bonds as an investment, though people should also consider high-yielding CDs at the moment, particularly CDs from PenFed.org that are leading the national averages. See this thread for discussion.
Update 05/03/04:As of May 1, EE bonds pay 2.84%, while I bonds pay 3.39%. The fixed rate component on I bonds dropped to 1% (from 1.1%).
Update 11/03/04:As of November 1, EE bonds pay 3.25%, while I bonds pay 3.67%. The fixed rate component on I bonds stayed constant at 1%.
Update 06/03/05:As of May 1, EE bonds pay 3.50%, while I bonds pay 4.80%. The fixed rate component on I bonds increased to 1.20%.
Update 10/17/05:Updated to incorporate xerty's strategy thread and the renewed interest that savings bonds are seeing from this and similar approaches. Some obsolete material removed, new material added, along with a request for update suggestions.
Update 11/02/05:As of Nov 1, EE bonds pay 3.61%, while I bonds pay 6.73%. The fixed rate component on I bonds decreased to 1.0%.
Update 05/01/06:As of May 1, EE bonds pay 3.70%, while I bonds pay 2.41%. The fixed rate component on I bonds increased to 1.4%.
Update 11/01/06:As of May 1, EE bonds pay 3.60%, while I bonds pay 4.52%. The fixed rate component on I bonds remains at 1.4%.