There is a joke when speaking to portfolio managers that some people want to invest like an “old lady” or an “orphan” meaning that they are not willing to take risks in their financial future. In times of a rocky stock market and an unstable economy, there is something to be said for the safety and security of investing one’s hard earned cash into a Savings Bond.
US Savings Bonds are an investment option for those individuals who want to ensure that their principal isn’t depleted and that they are guaranteed a return on their investment. Since the mid 1930’s Savings Bonds have been a safe return on a consumers investments.
During different stages of American history, the federal government has needed to borrow money from their citizens. This money has been used to fund war expenses as well as ballot initiatives as there aren’t funds immediately available. Savings Bonds have not only provided consumers with a return on their investment but have helped avoid new taxes on US residents.
Although lacking the glamor of other riskier investments, Savings Bonds have a solid history of being a safe and practical way for individuals to diversify their portfolio. Currently over 55 million Americans have Savings Bonds in their investment portfolio because of the ease of their use. In general, Savings Bonds are affordable (investments as small as $25 can be made, accessible, competitive, convenient, offer tax benefits and yes, Savings Bonds are safe.
Please note like any investment there are some risks involved in purchasing Savings Bonds. There are penalties for early withdrawal and interest rates fluctuate with the market thus not providing with the biggest return on a possible investment. But, if you want to plan for a long-term investment strategy (like retirement) this will keep the initial investment intact.