Bismarck, North Dakota – Many of us were given a savings bond as a gift for a particular occasion by family or friends. But in the modern financial climate, are these still useful gifts?
Savings bonds were widely used while interest rates were between 15% and 20%, according to financial advisor David Wald, in the late 1970s and early 1980s. Savings bonds haven’t paid very much from the 2000s until the present, nevertheless. He believes they are still acceptable gifts, but advises people to consider the recipient’s time constraint in case another present would be more appropriate.
“You could do a CD, you could invest in a stock, you could invest in a mutual fund, an ETF, a corporate bond. There’s a lot of different investment options out there and what you want to do I sit down and evaluate which is the best one, not only for you but the person you are giving the gift to,” said David Wald, Managing Partner of Lux Wealth Advisors.
According to Wald, you should take savings bonds that have been accumulating for years to your bank to check what they are worth. He warns that you might discover that they are currently just paying you a percent or less. Even short-term interest on a money market account, according to him, is now paying more.