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When I think about savings bonds, I think of stodgy, low-yielding investments that my parents and grandparents used to buy. They bought savings bonds, squirreled them away in their safe deposit boxes and saved them for a rainy day. Often, they sat in those safe deposit boxes until they matured in 30 years. They were then cashed, to pay for our education or to supplement our parents' or grandparents' retirement income. In those days, a Depression mentality still prevailed in our society; everyone was afraid of losing everything just as they did during the Great Depression. The most popular investments were safe, very safe: bank passbook savings accounts, certificates of deposit, and US Savings Bonds. Some people still stuffed cash into mattresses or buried it in a jar in the back yard.

The Baby Boom generation (as well as generations X and Y) certainly seems to have shaken that Depression mentality. We struggle to live within our means because there is so much stuff out there that we want and that we think we need. It is difficult to say no to ourselves. We are borrowing, usually using credit cards, to consume. We are paying later for consumption now. Our grandmothers would fall away into a dead faint at the very thought.

The best-kept secret of the US Treasury is the new Series I savings bond. These bonds, like the older Series E and Series H bonds, are backed by the full faith and credit of the US Government. This means that there is little or no default risk, although these investments are not guaranteed to increase in value.