Wednesday, November 26, 2008

Buy Bonds for Xmas

Christmas is right around the corner and this year, I am getting an early start with Christmas shopping. Unfortunately, others in my family are the same way. In fact, some family members have already bought entire shopping bags of toys for the little ones in my family. So, to avoid adding to the clutter, I've decided to give zeros for Christmas.

Zeros (or zero coupon bonds, in other words, EE savings bonds that you can get at the bank where there is no interest paid out regularly...) are a great option if you have someone in your life that already has met a quota of reasonable amounts of toys/gifts for Christmas.

Deals abound this year, that is certain. So shop around both online and in the brick-and-mortar stores and resist the urge to buy lots of items that people don't need just to fill up the space under the tree. In the end, I think that nearly any decent investment aimed at the long term (like a zero bond) is the best choice for the little kids in my life.

There may be some advantages if used for education.

There are options if the money is needed for a down-payment on a car or house though.

Certainly the interest rate is not great; and if inflation is a real concern, perhaps IBONDs are a better bet. Buying these electronically was also an option, but for now, I opted for the old fashioned method of buying them at a bank.

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