But the parents are legally bound to spending on their children's education. When the minor turns 18, the fund is in their hands. Mutual funds are the most risky choice, but the returns on mutual funds could be enormous. This creates popularity among students. U.S. savings bonds are one of the most reliable investments, although they are not as popular as mutual funds and savings accounts.
Savings bonds work differently than most other means of investment.
Over a given time, usually about 10 years, the savings bond regains all of its value and it starts to gain profits. Savings bonds are usually guaranteed by the government, so there is little chance of losing money if you use the savings bonds correctly. The main way of losing money with savings bonds is if the bonds are cashed before they regain their value. Savings bonds are a good bet if you plan to keep them for a long period of time. They just do not work properly as short-term investments.