There can be many advantages to Old Aunt Agatha's practice of giving all of her nieces and nephews savings bonds each year. Besides offering several tax advantages, savings bonds can provide a reasonable, inflation-indexed return and a steady investment vehicle for the long term--not to mention the safety and backing of a U.S. government-issued security.
U.S. savings bonds have gone without due recognition as a savings and investment vehicle. Yet they have some distinct advantages. They can provide a guaranteed way to accumulate funds that will mature on a given date. They provide income tax advantages when used correctly in savings for education. And they can provide a very fine emergency fund.
As any other investment vehicle, they have a place in a portfolio. Review your investment goals and objectives to see whether U.S. savings bonds might not fill a certain niche.