Savings Bonds: an inconvenient savings plan

Friday, April 28th, 2006
Categorized as: Savings Bond FAQ

The April 14th It’s Your Money in the Navy Compass says the inconvenience of redeeming Savings Bonds makes them better than other investments because it prevents impulse buying.

Not only is it a good idea for Sailors to invest in TSP [Thrift Savings Plans], but the little recognized U.S. Savings Bonds are a great way to put away money that is easily forgotten about, but able to use without penalty if needed.

Savings bonds can be conveniently purchased on MyPay, but are inconvenient to cash in because you can only go to a few financial institutions to cash them in. The inconvenience of the bonds is a good thing because it keeps you from using the money for impulse buying.

“Having an inconvenient savings plan can help with impulse buying because you don’t have the money on hand, but you can get it without penalty, it will take time and give you time to think whether or not you need that item. The U.S. Savings Bond is hands down the best inconvenient savings plan I’ve come across,” said Kaufman.

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FDIC Insured Certificates of Deposit can pay 1 or 2% more than savings bonds when held for a similar length of time. See top CD Rates Below:


On April 30th, 2006 cregg steffler said:

All quite true.

BUT I am wondering how many of your readers know what “TSP” amd “MyPay” are…?

On April 30th, 2006 Tom Adams said:

Cregg – You must have missed the “[Thrift Savings Plans]” after TSP above, which I added since TSP wasn’t otherwise defined in this section of the article, although it had been defined earlier.

MyPay wasn’t defined, but I assume it’s an online payroll program of some kind.

On rereading this, the bigger issue is probably the “use without penalty” part, since there is the three-month penalty for early withdrawal.

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June 1, 2010

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