INVESTMENT ACCOUNTS » Investing Money

Since the inception of the US Savings Bond program in the 1930′s, savings bonds have been issued sequentially in alphabetical order. Starting at the letter “A” and working their way through the alphabet. The bonds include “E Savings Bonds.”

E Savings Bonds (EE/E) are a safe, government issued, savings products that pay interest over time. The E Savings Bonds purchased between May 1997 through April 30, 2005 will pay interest based on current market rates for up to 30 years from the original issue date. E Savings Bonds purchased after May 2005 are earning a fixed rate of return of 3.50%.

All savings bonds, including the E Savings Bonds, can be purchased through the government’s treasury portal, at almost any financial institution or through your employer’s payroll deduction plan.

With the big hits in the financial industry in recent months many people are being cautious about their investment. If you’re tolerance to risk is low, but still want to make some returns on your investment you may want to consider putting your money into Treasury bills or mutual funds. While very stable, Treasury bills (also known as t-bills) tend to have lower rates, and hence lower yields, than commercial bills.

Both commercial bills, also known as commercial paper, and Treasury bills are popular investment products. Commercial bills or paper are issued by corporations, and t-bills are issued by the federal government. The question for the investor is, “Which of these issuing entities is most likely to be able to pay off their bill when it matures?” Invariably it is the Treasury bill, because the government can raise tons of money through taxes, whereas an individual corporation has limited revenue (by comparison). So, since no corporation can match the Treasury bill’s credit rating, the issuing corporation has to instead tempt investors with the promise of a higher yield. Therefore, Treasury bills tend to have lower rates than commercial bills.

One tool that can be used to help with saving for your kid’s college education is Education Bonds.

Since the 1930′s US Savings Bonds have been a safe and secure way for consumers to invest their money with no loss to their principal and a guaranteed return on the investment. To use the Education Bonds for your children and their education the bonds must be EE or I Bonds issued January 1990 or later. At the time of purchase the intent of using the Education Bonds for your children does not have to be declared but there are certain specification that must be adhered to.

The person purchasing the Education Bonds for your children must be at least 24 years of age and must register the bonds in their name to take advantage of the tax benefits at a later date. Do not list the child as a co-owner, but children can be listed as a beneficiary and the education exclusion can still apply. If a married couple is purchasing the bonds a joint return must be filed and the tax documents must accurately report both the principal and the interest on the bonds to pay for the qualified educational expenses.

An issuing bank is a bank that issues a certificate of deposit (CD). The CD can be of several forms for example regular certificates of deposit (CDs), variable-rate CDs, eurodollar CDs, multi-step CDs, market-linked CDs.

When you purchase CDs from a broker firm, it can be quite a bit different than making the same purchase directly from a bank. While the results of your investment will be quite similar, some details of a brokerage CD might be different.

Why Buy a Brokerage CD?

After the recent financial crisis, many people begin to think that no investment is safe. Luckily, this is not quite true. Let us review the lowest risk options available to an individual investor.

When individuals invest in certificates of deposit, the question of how fees – and even commissions – affect the rate of return often comes up. In some instances, there are no commissions to consider, but often, there are. Commissions are most common in brokerage CDs, which is why it’s important to learn about them before investing.

What You Should Know About Brokerage CDs

Investors are currently scrambling trying to find safe ways of diversifying their portfolios and to earn a return for their investments. Treasury direct bonds are an option worth considering after you educated yourself on the advantages of this type of investment.

Treasury direct bonds have been a strong investment strategy since 1935. President Franklin D. Roosevelt signed legislation creating the first “baby bond” and that act had prompted large participation by Americans living during that time. United States Savings Bonds are basically a way for the government to borrow money from their citizens by offering a guaranteed rate of return over a long period of time for the loan. The act of purchasing a treasury direct bond is a way to help finance the needs of the government.

The advantages of treasury direct bonds are:

Bail bonds exist as a way to help get someone out of jail and act as a way to ensure their appearance in the criminal court system.

Treasury direct bonds and bail bonds do have similarities as both act as a type of IOU. With a purchase of a treasury direct bond, a person is loaning their money to the U.S. Government that will guarantee not only the full return of the principal but the payment of interest. A bail bond is like an IOU for a defendant involved in litigation. Money is provided to the court system in the form of a bail bond and the bail gets the person free. To get the money back from the bail, the person must show up in court and meet all their legal obligations as promised.

The bail bond system is unique to the criminal court system of the United States. Those in need of bail bonds tend to see agents who are in the business of catering to criminal defendants.  If a person is arrested, a judge will post a bail value that can be paid so the person does not have to spend their time in prison awaiting their trial. A bail bondsman is the person that can provide you a loan to post bail. Remember, it is crucial that the accused makes all their court dates as the money cannot be reclaimed otherwise.

The recent banking crisis and the Madoff fraud taught everyone to be cautious. Some people might want to put a significant part of their portfolio into very safe investments. Even the more risk-loving investors usually prefer to have some riskless assets.