savings-bond

Vocabulary Word

Definition

A 'savings bond' is a type of investment where you lend money to the government. Over time, the bond earns interest and the government pays back more money than you lent.

Examples in Different Contexts

For education savings, 'savings bonds' can be used to save money for future educational expenses due to their safe nature and favorable tax treatment. A parent might discuss, 'We're investing in savings bonds for our children's college fund because of the tax advantages and the safety of the investment.'

Practice Scenarios

Finance

Scenario:

The client is looking for low risk investments with decent returns. Any investment vehicles you might recommend?

Response:

How about recommending savings bonds? They provide a guaranteed return and are virtually risk-free.

Education

Scenario:

Your child has got admission to a good school. Now it's time to talk about funding their education.

Response:

That's why we started investing in savings bonds when they were born. It should help cover some of the education expenses.