Recent economic times have been somewhat like a roller coaster; ups-and-downs, twists and turns have marked the past several years. We've lived the dot-com bubble, when riches seemed just a stock investment away, the dot-com bust, when reality reasserted itself, and the recent recession, when it seemed impossible to know the best place to get a good return on investment-a place to feel safe. Through it all, only one thing seems clear-if you expect a good retirement you have to continue to save and invest, and a balanced portfolio will protect you from the worst of the gyrations.
Millions of savers and investors have rediscovered the value of an old standby-United States Savings Bonds. Savings Bonds may not be the most exciting investment on the block, but one thing is sure in this uncertain world - they are a steady performer that won't (can't!) lose money. Whether you choose Series EE or Series I Bonds (and, increasingly, people are choosing the I Bond), returns are comparable to the returns available on other savings instruments. Savings Bonds add balance to any existing portfolio, and are a great way to start saving and build capital to the point where you have enough to diversify.
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The two types of Savings Bonds offer consumers a choice. The Series EE is sold at half of face value and earns interest at 90 percent of the average return on five-year marketable Treasury securities, with rates adjusted semiannually to track the marketplace. The Series I is indexed to inflation, earning a two part return-a rate fixed for the life of the bond plus the rate of inflation, again adjusted semiannually to track changes in the consumer price index. Both come in denominations ranging from $50 to $10,000, both are tax advantaged with interest exempt from state or local income taxes and Federal tax deferred until redemption or final maturity. Both are guaranteed safe by the full faith and credit of the United States.
For savers and investors who occasionally have to tap their resources (you know who you are), bonds offer easy redemption at most financial institutions any time after they've been held twelve months. And there are no restrictions on redemption, no capital gains to report, and only a small interest penalty if the bonds are redeemed before being held five years.
Savings Bonds currently earn better returns than many savings or money market accounts and short-term CDs. Add their purchase flexibility, their tax advantages, and their safety-I Bonds even increase in value beyond inflation, no matter what that is-and you've found a great way to save or invest regardless of income or other resources.
There are many ways to buy bonds. The easiest is through the payroll savings plan. But bonds can also be purchased over-the-counter through financial institutions, or by automatically debiting your savings or checking account using the Savings Bonds EasySaver Plan. You can even buy and hold bonds electronically through TreasuryDirect at www.treasurydirect.gov . The same site offers extensive information and resources helpful to bondbuyers and owners.
For anyone who craves a safe haven, or just wants a future with more balance in their portfolio and in their lives, U.S. Savings Bonds are well worth consideration. They may seem a bit boring, but boring, safe and sure are good things when you're striving to reach saving or retirement goals.
Do Your Future Justice !
The Payroll Savings Plan is simply one of theeasiest and surest ways to save money. You only have to enroll once to start years of regular, automatic allotments. The Payroll Savings Plan is flexible. If your needs and goals change, you can adjust your allotments anytime. You can also choose an allotment amount that fits your budget, with many employers allowing allotments as low as a few dollars each pay period.
It's easy ! Depending on what organization you are in, use either NFC Self-Service, or Employee Express to sign up online, or fill out the enrollment form and provide it to your Human Resources Office.
Last Updated April 26, 2005
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