Savings Bonds?

SheriBT

My mother mentioned to me the other day she'd like to do something to start a little "nest egg" from Grandma.  I am in full support of the idea because it'd be nice to save some money for him instead of getting all sorts of toys for celebrations, which I am sure he'll get from his aunts and uncles, etc.

So, she asked me about savings bonds and if they were a good idea.  I am not sure how to respond because with interest rates and the economy being the way it is, I am not sure if it is a good idea or if she should just open a savings account, or just hold onto it?  I am unfortunately, not too savvy with this and have been trying to do research, but it makes my head spin.

Any opinions on this?  What are you doing (if you are) to start a little nest egg for the LO?  Thanks so much.

madonnadouwanna

My grandparents have been giving us savings bonds for years.  The good thing is that you are not tempted to use the money for the 30 years they mature.  Just a thought. 

Chrysallys

I'm interested in any answers myself. My mom also wants to buy a big savings bond for my son. I always got them growing up for my birthdays and man, did they ever save my ass during college. I would love for him to be able to have that extra bit of money "socked" away.

LoveEeyore

It depends. The gov't can actually buy back savings bonds for crap if the economy is bad enough.  At this point I would look for a good CD, depending on the amount with fixed interest.  He have a 529 for DD and lost over $10K.  Anything we set aside for her or the twins in the next 18 months will be CD's or a simple interest-bearing savings account that can be added to.

cmd78

LoveEeyore:

It depends. The gov't can actually buy back savings bonds for crap if the economy is bad enough.  At this point I would look for a good CD, depending on the amount with fixed interest.  He have a 529 for DD and lost over $10K.  Anything we set aside for her or the twins in the next 18 months will be CD's or a simple interest-bearing savings account that can be added to.

Thanks for this post!  I was going back & forth between a 529 & a CD.  I'll go with the CD for now.

heatherlane

Savings bonds really aren't worth it...definitely go with CD's. Start a savings or high interest money market, and when it hits $1000, invest that in a semi-short term CD (12 months or so depending on how fast you accumulate savings). By the time that one graces, you should be able to go to a slightly longer term and add the money you've saved in the meantime. It's kind of like a ladder...when one matures, add what you've saved in the meantime and find a new one. Once you hit $5000 there are some good specials out there if you call around, esp. for longer terms. Start with your own bank, too, because generally a banker can add a little incentive for keeping everything at one place.