Savings Bonds – The Safe Place to Save Money Safe Savings Vehicle or Underperformer?
If you’re tired of the pitiful interest rate on your savings account at the bank, you may want to look into U.S. savings bonds for an equally safe place to keep some of your savings. With most bank accounts, the safety of your money comes from being insured by the Federal Deposit Insurance Corporation, or FDIC. This provides insurance on up to $100,000 per depositor. Unfortunately, while your money may be safe, there is a good chance the interest rate on the account is quite low. With U.S. savings bonds, your money is also safe, but it isn’t through FDIC insurance. Savings bonds are backed by the full faith and credit of the United States government. For individuals who are seeking safety of their principal, they can rest easy knowing that as long as the government is around, they are obligated to repay your principal and interest. Tax Benefits of Savings Bonds Because savings bonds are issued by the federal government, they are exempt from state and local taxes. In addition, the inter
