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Ask Dave

eBonds a Good Idea?

Ebonds don't pay anything - you're almost paying to invest in them. Put your money in an ESA inside a good growth stock mutual fund.

QUESTION: A listener asks Dave if eBonds are the best way to invest for his grandchildren. 

ANSWER: EBonds don’t pay anything – you’re almost paying them to invest. 

I would suggest opening an ESA (education savings account) for as little as a $250 lump sum.  An ESA inside a good growth stock mutual fund will grow your money at a much better rate.  After you’ve set up the ESA, you can put $50 in each year.  This money has to be used for college though, or else you’ll have to pay penalties and taxes.