How Do Saving Bonds Work?

Series Summary

Personal finance is the application of financial principles to the monetary decisions of an individual or family unit. It addresses the ways in which individuals or families obtain, budget, save and spend monetary resources over time, while taking various financial risks and future life events into account. Components of personal finance might include checking and savings accounts, credit cards and consumer loans, investments in the stock market, retirement plans, social security benefits, insurance policies and income tax management. In this free video series, a personal asset manager provides information on using the bond market effectively and efficiently. Find out how savings bonds work, how appeal bonds work and how to make money buying bonds. Learn about types of surety bonds, what is needed to cash in savings bonds and how to buy government bonds. Gain a better understanding of how bonds work and how they can be used with tips from these free videos.

Video Transcript

"Hello, I'm Roger Groh with Groh Asset Management. Uncle Sam needs you. Well, maybe not you personally but he definitely needs your money. One of the ways that you can help Uncle Sam is by buying US savings bonds. Now these are really just like any US treasury note or bill with a little bit different tax consequence. But the way that you buy them is totally different. You buy them at your local bank for instance as opposed to your local brokerage firm like you do with traditional stock or bonds. Now today because banks more often than not have a brokerage firm associated with them, you may be able to do them in the same place, it's just one person wears a bank hat and one person wears a brokerage hat. And these are in the case of US savings bonds, fully guaranteed obligations of the US government. Traditionally they pay a little bit less interest than the traditional bond market because there are some favorable tax consequences with owning them. And more often than not, you buy them as gifts, that's their primary use and you give them to fund an education fund for a grandchild or a grandson or whatever it might be. So look at these as really as a marketing net setup by the US government to be sold through the banks to raise capital. I'm Roger Groh, that's a little bit about US savings bonds and how you buy them and remember, Uncle Sam wants you. Thank you for spending a few minutes with me."