Retirement Plan

U.S. savings bonds are certainly a safe place to save money, but you want to make sure that you’re putting money into bonds for the right reasons. Remember, the interest rates can be higher than a typical savings account, but there may be some liquidity concerns to contend with first. If there is a chance you may need access to the money inside of one year, keep in mind that you cannot redeem a savings bond until one year has elapsed. In addition, you will forfeit three months’ interest if you redeem a bond prior to five years.
Even with interest rates generally higher than your bank account, savings bonds should not make up a significant portion of your long-term savings. Compared to other long-term investments like stocks in your retirement account, the interest earned is quite low. Stocks historically return between 10-11% on average per year, so investing for your future solely in savings bonds will probably not yield the best results.
Savings bonds should be considered for financial goals somewhere between five and ten years away. After five years you may redeem the bonds without penalty, but hanging onto bonds for much longer than ten years and you could probably see better returns with other investments.

Individual saving means spending less on consumption than available from one's disposable income. What an individual saves can be held in many ways. It can be deposited in a bank, put into a pension fund, used to buy a business, pay down debt, or kept under the mattress, for example. The common element is the claim on assets that can be used to pay for future consumption. If there is a return on the saving in the form of interest, dividend, rent, or capital gain, there can be a net gain in individual saving, and thus in individual wealth. Suppose an individual decides to increase saving by consuming less. His cutback in spending necessarily means a reduction in income to others. They in turn might cut their consumption to match the loss of income, but then others would lose income. Most people do not reduce consumption equal to the loss of income, so there will usually be a net reduction in saving. Thus the net saving of everybody else may decrease more than the original increase, which would result in a decrease in aggregate saving