Ask for savings bonds instead of gifts?

rigel496

I look at registry stuff and I don't think we need most of it, the wedding is far from our place, and we don't need more stuff. So that leaves asking for cash and gift cards to food places/gas stations. I thought that maybe I should ask some savy-investor family who are attending to give us savings bonds instead, and they can easily deduct them as a tax right-off.
 I don't know if bonds are a traditional gift, they don't have the best interest rate 1.18% compounded semi-annually. So maybe  I just ask for cash and put the $ into a higher interest option... but of course with cash, we will totally want to spend it, so I can't guarantee me n hubby will actually ever get it into savings.

Has anyone gotten bonds as a present? is it tacky? or smart ? i dunno thoughts...

annathy03

No!

Just do a small registry of sheets, towels (yours will wear out eventually) and any items you'd like to upgrade (nicer toaster, blender, whatever).  People who prefer to give boxed gifts will still have options, but most people will take the hint and write you a check.  Then you can invest your gifts however you see fit.

MNVegas

Do not ask for bonds. Do not ask for cash. Do not ask for gift cards. Do not do any kind of cash registry. Asking for cash in any form is not appropriate. Do a small registry for people who want to do a boxed gift and other guest will give cash if that is what they want to do. People know cash is a great gift and do not need to be asked for it. Good luck with your wedding planning!

Liatris2010

rigel496 said:

I look at registry stuff and I don't think we need most of it, the wedding is far from our place, and we don't need more stuff. So that leaves asking for cash and gift cards to food places/gas stations. I thought that maybe I should ask some savy-investor family who are attending to give us savings bonds instead, and they can easily deduct them as a tax right-off.
 I don't know if bonds are a traditional gift, they don't have the best interest rate 1.18% compounded semi-annually. So maybe  I just ask for cash and put the $ into a higher interest option... but of course with cash, we will totally want to spend it, so I can't guarantee me n hubby will actually ever get it into savings.

Has anyone gotten bonds as a present? is it tacky? or smart ? i dunno thoughts...

No, no, no.

You do not ask for money. Never. In any form.

Maybe now you are thinking, but how is asking for gift cards different than asking for linens or china? I'll tell you how:
A traditional registry is for the guests. They decide they want to buy you china, but don't know what pattern you like, or they want to buy sheets, but don't know what size/color you need. The registry tells them, and also tells them if someone else maybe bought the same thing already.

Cash comes in many denominations, but it is still one size fits all. Everyone knows it makes a good gift, and that duplicates are still appreciated.

Registering for cash makes you look rude and greedy, and tells your guests that either you think they are too dumb to know how great money is, or that you are willing to be rude to make sure you get some of their paychecks. Either way, you will not look good.

If you don't want boxed gifts, skip the registry. When people ask where you are registered, you say, "We aren't but we are saving for a _______," and the person asking can figure it out from there.

photokitty

Everyone knows that cash is always useful and appreciated. If you want cash, set up a small registry or none at all. Some people will want to buy you physical gifts regardless, so having a small registry will reduce the likelihood of randomly chosen gifts. Just tell people when they ask, we are saving for _______ (house, car, big screen, honeymoon), that's perfectly acceptable. To answer your question, it is tacky to register for savings bonds. Sorry. GL!

KatWAG

Do not ask for bonds. Do not ask for cash. Do not ask for gift cards. Do not do any kind of cash registry. Asking for cash in any form is not appropriate. Do a small registry for people who want to do a boxed gift and other guest will give cash if that is what they want to do. People know cash is a great gift and do not need to be asked for it. Good luck with your wedding planning!

I quoted so that you could read it again.

Plus bonds arent a great way to invest your money, the rate of return is tiny.

(stuck in the box)

Jen4948

It's fine to want cash, but it's not fine to ask for it in any form...including savings bonds.

If you don't want boxed gifts, don't register.  But acknowledge graciously any gift you get that you don't want.  You don't have to keep it-just be discreet about disposing of it.

MyNameIsNot

rigel496 said:

I look at registry stuff and I don't think we need most of it, the wedding is far from our place, and we don't need more stuff. So that leaves asking for cash and gift cards to food places/gas stations. I thought that maybe I should ask some savy-investor family who are attending to give us savings bonds instead, and they can easily deduct them as a tax right-off.
 I don't know if bonds are a traditional gift, they don't have the best interest rate 1.18% compounded semi-annually. So maybe  I just ask for cash and put the $ into a higher interest option... but of course with cash, we will totally want to spend it, so I can't guarantee me n hubby will actually ever get it into savings.

Has anyone gotten bonds as a present? is it tacky? or smart ? i dunno thoughts...

It's not appropriate to ask for cash, bonds, or any sort of gift at all.

If you don't want items that would go on a traditional registry, skip the registry.  If people ask, say "we don't really need anything around the home, but we're saving toward X."  People who are comfortable giving money will do so.  Those that aren't will pick out an item or forgo the gift.

If you want savings bonds, buy them with the cash gifts you receive.  

manateehugger

Asking for cash in any form is honestly one of the tackiest things a person can do.

Viczaesar

Good God, no.

hoffse

Everybody else has covered the fact that asking for savings bonds is not a good idea.

Another reason it's not a good idea?  1.18% doesn't keep up with inflation.  You're better off taking cash that people give you and investing it in mutual funds or some other investment vehicle - I've gotten a 20% return so far this year on ours.  I got 22% last year - average is 14% over the last 10 years, which includes the 2008 mess.

Also, the tax-write off is minimal if folks stick to giving you about $100/family - that amount varies a lot by circle but it's a figure I've seen a lot from posters on this board, and it was certainly our experience. I would guess that 95% of the time, a $100 bond doesn't change their taxable income in any noticeable way.

hoffse

I want to clarify: when I say it wouldn't make a noticeable difference, I don't mean that $100 isn't a lot of money - it is.  But their tax savings might be $25 or so (probably max), depending on their marginal tax bracket, and it would very likely be less than that.

The $100 bond only becomes profound if that extra deduction drops them to a lower marginal tax bracket or suddenly qualifies them for extra tax breaks because it lowers their income enough.  So in that instance their $100 gift has resulted in a multi-thousand-dollar tax refund.  And obviously that would be a great return. 

BUT I can almost promise you that 1) the likelihood of the numbers working out that way is slim and 2) people who track their income closely enough to notice this (I am somebody that does do this) would probably be more likely to increase their 401(k) contributions to drop them down to the lower marginal tax bracket, because a 401(k) contribution can be invested in a variety of ways that are age-appropriate.  Bonds are really age appropriate in the 45+ crowd... and that's only if they've had enough aggressive growth since their 20's that they can afford to slow down.

So I don't think it's going to change much about their tax liability unless they are savvy enough to know how this works and all their other deductions are still leaving them $100 shy of that lower income threshold they need to hit for the year.  Since H and I are young, bonds aren't a great investment for us right now because we need aggressive growth.  So we would exhaust all our other options before going this route to lower our incomes.  In your 20's and 30's, you really need to be beating inflation, after all.

Just my $0.02, which, 10 years from now, will be worth about $0.01.

NYCBruin

I agree with everything PPs said about this not being a good idea etiquette wise.

And there's a lot of misinformation about taxes flying around.

I'm fairly certain there's no deduction or "write-off" for givers of bonds.  The major tax benefit of bonds is that the holder of the bond (in the case of a gifted bond, the recipient NOT the giver) doesn't have to pay state or local taxes on the interest accrued (you still have to pay federal tax unless you are using the bonds for certain educational expenses).  

Marginal tax rates are just that, marginal.  If you are "bumped" into another tax bracket, only the money you earn ABOVE the amount is taxed at the higher rate.  In other words, say the tax brackets are 5% for $100 and less and 10% for income over $100.  If you earn $110, your marginal rate is 10%, but you only owe $6 (5 on the first hundred and 1 on the $10 above $100) in taxes, not $11 (your entire income doesn't suddenly get taxed at 10%).  The same is true of deductions, since that first $100 will always only be taxed at 5%, even if you have a $10 deduction, the resulting decrease in taxes is only $1.

The vast majority of tax credits are phased in and phased out, not cliff-like.  They increase or decrease slowly as your taxable income increases or decreases, not appear or disappear.  Also individuals who are eligible for tax credits tend to take the standard deduction (meaning they can't write of individual things) since itemizing usually only makes sense for individuals with big ticket expenses to deduct like lots of state taxes or large amounts of mortgage payments.

Bottom line, there really isn't any tax benefit to gift givers who give bonds rather than cash unless they are giving the bonds to a charitable organization or a child as part of a college savings plan.

rigel496

Yea, my mom and another bridesmaid agreed tacky...and yea ppl with $ will get the hint, and I guess there are a few household items I could register. Thanks everyone, yes, I hadn't given to much thought to investing savings or etiquette, good to know that there are so many researched people here!

photokitty

rigel496 said:

Yea, my mom and another bridesmaid agreed tacky...and yea ppl with $ will get the hint, and I guess there are a few household items I could register. Thanks everyone, yes, I hadn't given to much thought to investing savings or etiquette, good to know that there are so many researched people here!

Glad we could help