U.S. bonds can help Uncle Sam PERSIAN GULF SHOWDOWN

January 24, 1991|By Julisus Westheimer | Julisus Westheimer,Special to The Baltimore Sun

CHILDREN AND teen-agers who want to help the war effort, while also helping themselves, can do both by buying U.S. savings bonds.

When you buy savings bonds, you are lending money to our government. In return, Uncle Sam will give you more money than you started with by paying "interest." It is money you receive for letting someone else use your cash.

Many of you earn money by baby sitting, shoveling snow or doing chores around the house. To buy a savings bond, you would need to save at least $25. Try to do it by putting aside 50 cents for every dollar you get.

To buy a bond, take your money to a bank and ask to buy a Series EE bond. After you fill out a form, your bond will be mailed to your address in two to three weeks.

If you pay $25, the bond will be printed with a face value of $50. That means it will be worth that much money some day. It will take 12 years for the amount that you paid to double, or for the bond "to mature." Think of it this way: You lend the government your money for 12 years, so Uncle Sam pays you back twice as much in return for letting him use your cash all that time.

The good news is that you will be a smart investor. You will let your money make more money for you because you have learned to save.

The bad news is that once you hand over your money, you cannot get it back right away. You can't get cash for your bond, or "redeem" it, for six months.

Remember, the longer you wait to turn in your bond, the more money you make. If you paid $25 for a bond now, and turned it in next summer, it will be worth less than $26.

You have to wait at least 12 years for the bond to be worth double what you paid for it. You can keep it for 30 years if you want to get even more.

The rate of interest changes every six months. If you keep the bond for at least five years, the government promises that your interest rate won't fall below 6 percent.

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