savings bonds and rising interest rates, a good investment?
87794
Interest rates increase, prices of bonds decrease.
909565
Regular checking/savings accounts typically will not offer that high of an interest rate.  Rates like that typically aren't found from a bank on higher end CD rates.  \n\nYou could check www.bankrate.com
696816
I say go for it. I did when I was at school. I had excess student loan money after all my tuition had been paid. Made an excellent return on investment. as to the poster who says you should never borrow to invest...that is just madness...EVERY business borrows to invest (when a company issues bonds there are borrowing money from investors at a lower interest rate and investing it at a higher interest rate)and even the government does it i.e. Treasury bills are used to fund government expenditure. as a word of caution though don't invest in stocks. the stock market is not predictable. you are better off with a CD/Treasury bill or a municipal bond
344339
The first poster is correct. Bonds (or Treasury Bills, T-Bills) are the safest investment. They are considered risk free, and they're currently paying in the high 4-5% range.\n\nHowever, you can get a better return for just a slight increase in risk... you don't need to be entirely conservative.
219365
i would invest. you can write off home interest.
922982
HaHa, you'll be lucky.  A small amount like that will earn you almost nothing in any building society or bank.  If its money you dont actually need to live on you'd be better off buying a few premium bonds.  At least with those, even though the chances are millions to one, you might just get something back if your number comes up. But as for any bank or society increasing profit on your investment, you chances of living to 150 are higher!! Sorry but thats how banks make a profit.
732585
you are correct - you should have 3 yrs of savings and if you are young and working invest in stocks and bonds (deversfy) but if you are older  coming to retirement best to  invest in guaranteed CD's then you know your money will be safe
189132
529's are a great way to save money on a pre-tax basis, yes. There are other ways to do so, but they don't enjoy the same tax advantages. There's a risk & return calculation to be made there. You should talk with a financial advisor - there are some special tax rules involving gifts to children and spouses that might allow you to get some tax advantages as well while putting the money into some kind of investment vehicle. Treasury bonds (acutally bonds of all stripes) are a very attractive investment at the moment, with interest rates up so high.
981755
You are somewhat nebulous in your question.  What is substatntial to you and what is too much money to you? And how much risk are you willing to take?  \n\nING pays about 5% on on line savings accounts.  High yield bond funds pay about 9%.  You can purchase those through an on line broker or through a mutual fund.
598736
Probably it invest in municipal bonds and other bonds which are not taxed.  The yield will be low but very low risk.  Personally, I think that you would be better off investing in a portfolio of Exchange Traded Funds(ETFs).  With long term goals in mind the risk is not really a factor and the risk would still be relatively low.  Don't cheat yourself out of higher profits out of paranoia.  ETFs are mutual funds that trade like stocks and typically mimic an index such as the DJ30 or a commodity such as gold.  Very simple :)
1104813
If the interest is about the same between the guaranteed and un-guaranteed investments, I would without question take the guaranteed option.  Even if the interest is slightly higher in the unguaranteed option, having that security is worth the reduction in the interest rate.
582023
The advantage of taking out a loan is that you keep whatever savings or capital that you may have intact, for other investment purposes. This is particularly good, at a time when interest rates are low, so you pay very little for what you borrow and stand to make more by investing your savings in stocks, bonds, commodities etc.\n\nThis is however not a good strategy when interest rates go up, or, if you are taking finance at a high interest rate or over a very long term, because it is unlikely that investments would ever make up for the amount that you are paying in interest or fees.\n\nFor example, remortgaging a house to release equity which is then used to purchase say a car. A £20,000 car paid for in this way, using say a 25 year re-mortgage, could cost £50,000 in the end AND, assuming that a car only last for 10 years, you would have to continue paying for the car 15 years after it has gone to the knacker's yard. This is a very expensive use of money indeed!\n\nIn the UK, currently, a significant amount of personal debt is financed at high-ish interest rates. This makes the finance companies a lot of money but causes significant losses to the individual borrowing the money.
1070995
Higher rates slows down the economy by making the costs of borrowing higher.  Businesses invest less and consumers will spend less, so prices won't go up so much.\n\nHigher rates attracts more investors to the country because there will be a higher rate all around for both bonds and savings type accounts.  These accounts are all based on interest rates.  With more investment, the currency gets stronger from supply and demand.\n\nEdit: No, higher interest rates aren't the only indicator.  If investors feel that the currency is going to depreciate in the future because the economy is weak, then the country has to provide a higher interest rate just to balance that effect.
859314
Suggest you avoid simply using a bank. With the current interest rate you'll actually lose money due to inflation. You'd be better off looking into a long term CD or an IRA with deferred taxes. Talk to a financial adviser or tax attorney.
1149595
SOME SAY IT IS NOT WORTH IT, PERSONALY MY OPINION IS IT IS WORTH INVESTMENT IN THE LONGER TERM. ALTHOUGH 'START UP' FEES AND COSTS ARE GREAT. THE COST ON THE ENVIOMENT IS ALSO LESS.
534962
Well, I'm not a big fan of fixed-income investments, because they typically have no growth opportunity.  Given that outlook, my favorite fixed income investments are convertible bonds and convertible preferred stock, because these carry an opportunity for something over and above just the income.  Of course, you will pay extra for that component, but I still think they are typically more valuable.\n\nThe only other fixed-income investment I would consider in the current interest-rate outlook is the I-bonds, which are inflation-adjusted.\n\nYields shift constantly.  Check with the treasury for I-bond yields.  Convertible yields are quoted on finance sites.
1152955
EE Bonds gain intrest based on a fixed term rate.\nI bonds gain intrest based on rate of inflation.\nGood to own both to diversify your investments.