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Why are savings bonds the gift of choice among cheek-pinching grandparents all across the United States? The answer is simple: Bonds are a very safe way to save money and earn interest for the future.
In its most basic form, a savings bond is a formal kind of I.O.U. from the government. "When someone buys a savings bond, he or she is lending the government money. In return, the government promises to pay back the entire amount of that bond," says Gary Silverman, a certified financial planner at Personal Money Planning in Wichita Falls, Texas. In addition, the government also gives the bondholder a little extra money in the form of interest.
