Savings Bonds

[KevinNU7]

My son recieved a fairly large chunk of money for his baptism and the wife and I have decided to throw it all in a savigns bond so he can have it for college/post high school life.

I started to do some research online and my head is now spinning. Anyone have some advise and/or simple knowledge on the subject. I see no reason for this bond to be cashed before he graduates high school so we are looking for something long term 15-20 years.

[finketr]

do you have 529 plans in your state?

[KevinNU7]

Does 529 has more to do with paying for future tuition at current price? I don't think I can afford that.

Also, I don't want to limit my son to having to use the money for college.

[SnDvls]

This link should help. I would go with I Bonds for long term IMHO.

http://www.publicdebt.treas.gov/sav/sav.htm

and here is some more general info from a different site




General Information

Savings bonds are issued by the United States Treasury Department. Series E/EE, and I Bonds can be purchased or negotiated at any Pacific Trust Bank location; they can also be purchased directly from the US Treasury via its TreasuryDirect online service.

Starting May 1, 2005 the Series EE savings bond will have fixed interest rates for the life of the bond.

Interest rates on the Series EE bonds purchased prior to May 1, 2005 change every six months. The new fixed rate, which will be whatever the interest rate is in effect at the time of purchase, will not affect current Series EE bond holders or those purchased before May 1.

Bonds are registered securities backed by the full faith and credit of the United States; they cannot be sold or used as collateral. If lost or stolen, bonds can be replaced at no cost to the bond owner.

Here are some reasons for investing in U.S. Savings Bonds:

You can buy Series EE and/or Series I savings bonds for a small amount of money -- the minimum investment is $25 when buying a savings bond at Pacific Trust Bank.

They're lower risk than most investments since both principal and interest are guaranteed by the full faith and credit of the United States, and lost, stolen, or destroyed bonds can be replaced.

They're convenient - you can buy savings bonds through most financial institutions, through payroll savings plans, and online through TreasuryDirect.

There are no commissions or similar fees. Interest is exempt from State and local income tax and federal income taxation can be postponed until you cash your bond or until it stops earning interest in 30 years.

For more information about investing in savings bonds, see the U.S. Treasury Department's Savings Bond web site.

To determine the current value of U.S. savings bonds, go to the Savings Bond Calculator.

[MikeVic]

I read this as "Saving Bonds" and thought it would be about ways to save Bonds' stats...... :o

[digamma]

529 plans are simply savings accounts that can be used (subject to various state laws and other terms and conditions) on college tuition. They are tied to mutual funds or other commingled vehicles that can have greater return than a simple savings bond.

I'm not sure how much money you're talking about, but I'd look into something like that rather than just savings bonds. While bonds are certainly safe, if you're truly not going to touch the money for 15-20 years, you can probably stand a little more risk than a government bond--and reap more of a reward because of it.