Planning for Christmas? Now is the time…read on

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I know it may seem early to be talking about Christmas but this is the best time to begin planning for holiday’s gift giving season of 2020. I recommend an investment gift in the form of a:

    • U.S. Saving Bond
    • 529 Fund (for Children)
    • Stocks
    • Individual Retirement Account

If you’re looking to change the next holiday season consider a financial gift instead of the usual stocking stuffers. Financial gifts can help the young and the old understand investments and appreciate the savings experience by holding stocks or bonds. An envelope full of cash is a great idea but investment are an even better gift of giving. 

Savings Bonds versus Treasuries

Savings bonds and their companion Treasuries make wonderful financial gifts. Treasury securities: Treasury bills, notes, bonds, Treasury inflation-protected securities (TIPS) are called liquid securities because they can be easily be bought and sold on secondary markets after they are purchased from the Treasury.

Savings bonds are different from Treasury securities:

  • Savings bonds cannot be traded on a the secondary market.
  • Kids can own savings bonds.
  • Savings bonds are available for purchase as gifts.

Bonds are debt securities. They represent a loan to the U.S. government. Savings bonds earn interest for up to 30 years. After 1 year a savings bond can be redeemed for its face value and any interest it has earned. If the bond is redeemed early (five years) you will not get earned interest for the prior three months.

Check into whether you are getting Series EE or Series I bonds. Both accrue interest compounded semi-annually. The difference is the interest rate you receive. Series EE bonds issued on or after May 1, 2005, earn a fixed rate of interest. The interest rate of Series I bonds is based on both a fixed rate of return and a variable semiannual rate, indexed for inflation. 

You can purchase a digital savings bond as a gift through the TreasuryDirect website, a secure, web-based system operated by the U.S. Department of the Treasury. The process is a little complicated but with the assistance of your financial institution they can help buy a digital savings bonds. Here is how it works:

  • Go to
  • Log into your TreasuryDirect account (or open one in your name).
  • Purchase the savings bond you want, Series EE or Series I, from $25 to $10,000.
  • Deliver the savings bond gift to the recipient’s TreasuryDirect account.
  • Print out a gift certificate to give to the recipient.

You have to have the legal name and Social Security number and their Treasury Direct account number. Children under 18 years old will need a parent or legal guardian to set up a Minor Linked Account within their own Treasury Direct account. If not, you can still buy the bond and hold it in your account and transfer it at a later date.

529 Contributions

College costs are increasing and will continue. 529 College Savings Plans allow families to save for the future including a special ingredient: Tax Advantages. Their are two types of 529 plans: Savings and Prepaid Plans.

  • 529 Savings Plans: This plan is like a tax deferred plan (401Ks and IRAs). Your contributions are invested in mutual funds or other investment securities with an account set up for use while your child is in college.
  • 529 Prepaid Tuition Plan: This is a guaranteed savings plan and is administered by states and higher education institutions. You plan for future college expenses by pre-paying tuition and locking in today’s tuition rate.

Contributions are not deductible but grows tax-deferred. Distributions pay for college costs come out tax-free. The rules for a 529 fund vary from state to state so you should consult with your tax professional in understanding the rules of your state.

Exchange Traded Funds (ETF’s) are popular too! Consultant your finance professional to see which ETF investment is best for you.

You can also consider giving the following:

  • Stocks: Gift stocks you own or purchase individual shares from an online brokerage that supports stock gift-giving (Example: Robinhood and Stock Pile). 
  • IRA Contributions: If a child has income from a job, you can invest their funds through annual contributions (up to the allowable amount).
  • Cash: Cash is a welcomed gift.

Here’s a tip: Visit a Certified Financial Planner to help you and your children understand the time and value of money, savings and investing.

Financial gifts are always a great! Everyone will thank you because they become personal.

Have a great weekend and I’ll see you on Monday!

Robert L. Woods (a.k.a. R.LaMont. W.)

Robert L Woods

Robert L Woods

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About Me

Robert L. Woods is the retired partner of the Institute For Fiduciary Education ( that provided investment seminars for public and private pension funds, endowments and institutional fund managers. He spent 28 years working for the State of California, as a budget and financial analyst which includes 16 years as an Investment Officer for the California State Teachers’ Retirement System (CalSTRS). At CalSTRS, he established it as one of the nation’s first institutional home loan programs with a down payment assistance component. He also spent 13 years on the Board of Trustees for the Sacramento County Employees Retirement System (SCERS). He was a Trustee with the University of California, Davis, Cal Aggie Alumni Association and a member of the Chancellor’s Council on Community & Diversity. He is a Life Member: Phi Beta Sigma Fraternity, Inc., Theta Gamma Sigma Chapter, Sacramento, CA.

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