But they aren't very competitive investments and it doesn't make much sense to accumulate money in savings bonds with the intention of putting it in stocks later. First, the longer the holding period, the higher the probability of having a positive return owning common stocks. Time is on your side. Second, while you may enjoy tax deferral on the interest earnings of your Savings Bond investment, switching to stocks later would force you to pay all the deferred taxes interest income before you could reinvest. Third, taxable income from stocks isn't a big deal right now.
Dividend yields are at historic lows and the yields from many funds are nil.
A tax efficient fund would defer your gains on a return that could be twice as high as the return on Savings Bonds. Q. My mother is 69 years old, in good health, owns her own home and car and is currently debt free except living expenses. She is newly divorced and understandably nervous about her financial future. As her only child, she is trusting me to help her make some decisions in getting her settlement positioned in the best possible way. The CD's will be renewing soon.