Underrated in America: U.S. Savings Bonds


Pop Quiz: What popular American investment with more than 45 million investors has not lost one cent of its value during the recent turbulent months?

...Give up? It's the United States Savings Bond.

Issued by the US Treasury Department, the US Savings Bond program has been underrated since its inception in 1941. At the time, millions of Americans didn't see it as a way of protecting their money, they saw it as a way to protect their freedom. While the same can't be said of where the funds are going now, we do know that because of the recent fluctuations in the financial markets, US Savings Bonds are the safest investment available to Americans today.

How safe are they? They're backed by the 'full strength, faith and credit' of the United States government. That's nice isn't it, but what does it mean? It's commonly understood that the value of a US Savings Bond is guaranteed by the protection of the US government, and to earn at least the guaranteed rate of return for the life of the bond, usually 30 years. US Savings Bonds are considered low-risk because in order to lose value, the government would have to crumble, and let's face it, we'll have bigger problems than our savings bonds if that occurs. Safe, yes; I'd even say Super Safe!

Want even more of a reason to invest in US Savings Bonds? The Tax-Free for Education rules make them quite a flexible or helpful investment. Looking to help little Johnny get a jump-start on college tuition costs? The Tax-Free for Education rules allow for Savings Bond owners to cash-in their investment, provided they meet the nine tax-free savings bond criteria, and not have to pay the taxes when used to pay for higher education.

Don't miss the rest of our series on Underrated In America!