Analysis of U.S. Savings Bonds

Authors

  • Tom L. Potts Hankamer School of Business,BaylorUniversity,Waco, TX 767988000.
  • William Reichenstein Hankamer School of Business, Baylor University, Waco, TX 767988000.

DOI:

https://doi.org/10.1016/1057-0810(95)90017-9

Abstract

U.S. savings bonds are complex contracts. Financial pianners have traditionally paid littie attention to savings bonds, in part because they often offer below-market interest rates. However, they sometimes offer above-market interest rates, especially when one learns how to view and value their option features. All savings bonds contain put options that protect the investor against a rise in interest rates. Thus, they can be viewed as short-term, intermediate-term, or long-term bonds. The EE bonds also offer several tax options. We show how savings bonds can be used to beat the kiddie tax. to finance postsecondary education, and in retirement planning.

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Published

1995-06-30

How to Cite

Potts, T. L., & Reichenstein , W. (1995). Analysis of U.S. Savings Bonds. Financial Services Review, 4(1), 41–56. https://doi.org/10.1016/1057-0810(95)90017-9

Issue

Vol. 4 No. 1 (1995): Financial Services Review

Section

New Original Submission

License

Copyright (c) 1995 JAI Press Inc.

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