NerdWallet's Smart Money Podcast: "Savings Bonds Explained: When to Buy, When to Cash In, and If They’re Still Worth It"

Release Date: July 21, 2025

In this insightful episode of NerdWallet’s Smart Money Podcast, hosts Sean Pyles and Alyssa Elizabeth Ayola delve into the world of savings bonds, exploring their viability as an investment option in today’s financial landscape. Alongside engaging discussions about personal finance and budgeting for trips with friends, the episode features expert insights from Sam Taub and surprise guests from the Smart Travel podcast, Sally French and Megan Coyle.

1. Traveling with Friends: Personal Experiences and Financial Strategies

Before diving into the main topic of savings bonds, Sean and Alyssa share their personal experiences and financial strategies related to traveling with friends.

A. Budgeting for Trips

Alyssa highlights her approach to budgeting during trips, emphasizing a balance between individual and shared expenses. She states, “I usually just pay for things separately versus pulling money together and paying for the trip” (02:33), allowing for flexibility and personal financial management.

Sean complements this by explaining his method of combining individual expenses with shared costs, such as pooling money for an Airbnb and taking turns covering meals. “We don’t worry too much about counting the pennies. That’s generally how we budgeted, and it’s worked out so far” (03:10).

B. Managing Different Money Values and Personalities

Alyssa shares lessons learned from traveling, particularly the importance of understanding and respecting different financial values among friends. Reflecting on her trip to Mallorca, she notes, “Each person has different money values. Some value experiences over shopping, and others might want to spend their time differently” (04:07). This difference can lead to conflicts, as she experienced during a trip to Miami where differing expectations caused tension (05:07).

C. The Power of Communication and Budgeting

Alyssa emphasizes the necessity of communicating financial boundaries and sticking to personal budgets to avoid overspending. She recounts her own experience of overspending during a vacation without a budget, leading to financial strain upon return (05:50). Now, she carefully plans her budget and communicates her limits to travel companions, enhancing trip harmony (06:23).

2. Expert Insights: Sally French and Megan Coyle on Smart Travel

Midway through the episode, hosts welcome Sally French and Megan Coyle from the Smart Travel podcast to share their expertise on traveling with friends.

A. Identifying Compatible Travel Companions

Sally discusses the importance of recognizing that not all close friends make good travel buddies. “There are some people who are your best friends in your hometown, but they might not be good travel companions,” she explains (10:41). This insight encourages listeners to evaluate their travel partnerships thoughtfully.

B. Planning and Itinerary Sharing

Megan offers practical advice on group travel planning, suggesting that sharing the itinerary early allows friends to make alternative plans if certain activities don’t align with their interests or budgets. She cites her recent trip to Cinque Terre, where early sharing enabled friends to plan personal activities that suited their preferences (12:05).

C. Flexibility and Personal Space

Both Sally and Megan emphasize the significance of flexibility and allowing personal space during group travels. Sean adds that bringing a good book can provide a way to enjoy downtime without feeling pressured to spend excess money on unwanted activities (13:05).

3. Deep Dive: Understanding Savings Bonds with Sam Taub

Transitioning to the episode's primary focus, Sean and Alyssa bring in Sam Taub, a seasoned investing expert, to unpack the complexities of savings bonds.

A. Bonds 101: Basics and Types

Sam begins by defining a bond as an "IOU" where investors loan money to governments or corporations in exchange for interest over time. He categorizes the main types of bonds:

• Treasury Bonds: Loans to the U.S. government, highly trustworthy, and tradable on the market. Interest is federally taxable but exempt from state and local taxes.
• Savings Bonds: Non-marketable loans to the U.S. government, generally comparable to CDs with early redemption penalties. They offer fixed or inflation-protected interest rates.
• Municipal Bonds (Munis): Loans to state or local governments, slightly riskier than Treasury bonds with higher yields. Interest is often exempt from federal and sometimes state taxes.
• Corporate Bonds: Loans to companies, riskier than government bonds with higher yields, but fully taxable.

B. Yield Explained

Sam elaborates on bond yields, explaining that "yield to maturity" represents the annual return if the bond is held until it matures. He notes, “When yields go up, it usually means investors have lost confidence in the borrower’s ability to repay” (20:44), which can have macroeconomic implications, such as higher interest costs for the government.

C. Strategic Use of Bonds in Portfolios

Bonds are highlighted as essential for diversification, offering predictable returns to balance the volatility of stocks. Sam advises that younger investors may favor stocks for their higher growth potential, gradually shifting towards bonds as retirement nears to reduce risk (23:37).

4. Listener Questions: Evaluating Savings Bonds for Future Expenses

The episode features two listener-submitted questions about savings bonds, addressed comprehensively by Sam.

A. Are Savings Bonds a Good Investment?

Listener Teal asks whether savings bonds are worthwhile compared to other investment options for funding future education and living expenses. Sam discusses:

• Series EE Bonds: Offer a fixed interest rate with a guarantee to double the investment in 20 years. They are federally taxable but exempt from state taxes.
• Series I Bonds: Provide inflation protection with a combined fixed and variable interest rate, adjusting every six months based on inflation.

Both bonds allow for flexibility in usage, especially when proceeds are used for qualified educational expenses, which can exclude the interest from federal taxes.

B. Best Times to Buy and Purchasing Process

Teal inquires about optimal times to purchase bonds and the buying process. Sam advises that for non-marketable savings bonds, “the best time to buy them is whenever it makes sense for your long-term financial goals” (28:27), as there’s no market timing involved. He explains the purchasing process via TreasuryDirect.gov for electronic bonds and through banks for paper bonds.

C. How to Cash in Matured Savings Bonds

In the second question, Valerie seeks guidance on cashing in mature Series EE bonds. Sam clarifies that matured bonds can be redeemed without penalties and provides instructions:

• Electronic Bonds: Redeem through TreasuryDirect.
• Paper Bonds: Contact the issuing bank for redemption.

He also highlights the tax implications, noting that “income from savings bonds is exempt from state and local taxes but is federally taxable” (31:09).

5. Final Thoughts: Integrating Bonds into Financial Planning

Concluding the discussion on bonds, Sam emphasizes their role in providing financial certainty and managing investment risk. He recommends NerdWallet’s online brokers for those interested in purchasing individual bonds and highlights the importance of aligning bond investments with personal financial goals and risk tolerance (31:40).

Conclusion

This episode of NerdWallet's Smart Money Podcast delivers a comprehensive exploration of savings bonds, enriched by personal anecdotes and expert advice. Listeners gain a clear understanding of different bond types, their benefits, and strategic applications within investment portfolios. Additionally, the segment on traveling with friends offers valuable insights into balancing friendship dynamics with financial planning. Whether seeking to optimize investment strategies or manage group travel finances, this episode equips listeners with actionable knowledge to make informed financial decisions.

Note: All timestamps in brackets [MM:SS] correspond to points in the transcript where notable quotes and information were discussed.