using a mature bond for my daughter
My daughter, now 21, has a mature $100 US savings bond. I’d like to invest it for her (ITF or FBO ?)
and have it just sit and make money over time. In another 2 years, another $1000 bond will come mature, and I’d like to do the same with that. What’s the best vehicle? Money market, gold or CD? Or, something else? Thanks.
Terry Says
I’m assuming this is a Series EE bond, with a 20-year maturity. Here’s a wakeup call: She is 21. It is HER money! You can’t “invest it for her”!
But you can teach her some lessons. If it’s only $100, it’s enough to start an IRA at Fidelity or Vanguard, IF she has earned income. That’s the best start, and she could continue to contribute from her earnings up to $7,000 for 2025 — assuming she earns that much. Just put it in the S&P 500 stock index fund inside a ROTH IRA. (That’s an after-tax, no-deduction IRA, which will grow tax-free for her retirement.)
Or you could point out that she should pay down her credit card debt — likely costing 20%+ in interest!
But she is the one to make this decision!
Oh, and don’t forget, ordinary income taxes will be due on the increase in value.
