June 14, 2014
NONE OF YOUR SAVINGS SHOULD BE IN "SAVINGS" WHEN YOU'RE THAT YOUNG:
The death of U.S. savings bonds (Heather Long, June 14, 2014, CNN Money)
Posted by Orrin Judd at June 14, 2014 11:50 AMFor starters, savings bonds, which have been around since the 1930s, are no longer an attractive investment."The interest rates are so low these days that people just don't even get involved in them anymore," says Jim Moore, a Wells Fargo financial advisor based in St. Louis.The fixed-rate "EE" bond offers a mere 0.5% interest rate for the next 20 years, barely better than putting money under a mattress. Bonds issued at the end of last year were yielding an even more lousy 0.1% rate.Moore recommends buying a good quality, high paying dividend stock or exploring other savings options instead. Many parents and grandparents utilize 529 savings plans for colleges that are run at the state level. Investment growth in a 529 plan is tax deferred, and any money taken from the 529 to pay for college isn't taxed at the federal level.