savings bonds

Should You Redeem Savings Bonds Or Use Credit Cards For Vacation Expenses?

Posted on July 31, 2017

SavingsBonds.com reports summer vacation spending is hitting all time highs. Before swiping your credit cards to pay for your vacation, consider cashing in some lower yielding savings bonds before hitting the road.

Cashing in savings bonds earning only 3-4%, as opposed to paying 18-20% or more interest on credit cards – sometimes for several months or even years – may make a lot of financial sense.

SavingsBonds.com’s complimentary calculator is a quick and easy tool to obtain paper savings bond cash-in values. For first time users, a color coded, personalized, detailed Savings Bond Inventory Report© is also included, which is not offered elsewhere. Important detailed information for each bond, including interest rate performance, maturity, timing and taxation issues and more, are indicated. A “What This Means To You” report simplifies the information.

Investors owning several paper savings bonds should consider a bond management program such as SavingsBonds.com VIP Membership© (for as little as $5.95 a year) to receiving monthly e-Savings Bond Statements along with helpful reports and tools including the unique Cash-In Report©

By entering the amount of money needed, the Cash-In Report© will indicate which bonds should be cashed in first and which should be held, based on financial performance. It eliminates a lot of guesswork.

While savings bond are often purchased for retirement and education purposes, most people end up redeeming savings bonds for other reasons.

Cashing in some lower yielding savings bonds to pay for a vacation may be a lot smarter and less stressful than returning home to hefty and often high interest charging credit card bills. However, it is important to consider all financial consequences before redeeming bonds.

Check and compare values and interest rate performance for each bond so that you hold onto the higher yielding bonds and redeem the poorer performers. It is important to review the total interest earned amounts for each bond BEFORE they are redeemed. Total interest earned amounts will need to be reported on a Federal Income Tax Report in the year the bond was redeemed.

It is important to take into account all financial and potential taxation issues in order to make prudent financial choices of whether to use credit cards or redeem bonds to pay for your summer vacation.

 

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