For decades Savings Bonds have been a secure, safe, and reliable way for individuals to diversify their investment portfolios. There are tax benefits to investing in Savings Bonds, as well as getting back your principal and a guarantee return on an investment. However, Savings Bonds may not be an appropriate investment choice for you if you are looking to make money fast.
Savings Bonds are investments best used for long-term strategies because of how they pay the return on investments. US Savings Bonds were created by the Federal Government as a way for them to borrow money from US citizens when they were short on cash. Investors buy the bonds and hold onto them until they reach full maturity. Maturity is the term used when bonds have earned all the interest they can; this period can last up to thirty years. If you have decades to get a return on your initial investment then Savings Bonds are an appropriate investment choice.
For example, say you are in your mid twenties and only have about $1000 a year to invest. A US Savings Bond will make an appropriate investment choice because they will generate a sizable return in the long run and you have many years ahead of you. If you buy an I Series Bond at age 25, you will have to wait until age 55 until the Savings Bond Reaches Maturity.
With the average American woman living until the age of 79 and the average man living until 75, Savings Bonds are an appropriate investment choice until an individual reaches their mid to late forties. But as individuals exceed their fifties and come closer to their retirement age, Savings Bonds are no longer an appropriate investment choice.
For example, a woman who has just turned 70 would not get the full benefits of their matured Savings Bonds until she is 100 years old. Because of length of waiting time of Savings Bonds, they are an appropriate investment choice for those who are considered middle aged or younger.
