Friday, September 30, 2016

Data Usage in Streaming Music

A loyal reader asked us yesterday with a very good question about streaming music services: How much data does streaming music use?
Good question! Burning through your monthly data cap on your smartphone is a pain, and your music streaming app is probably guilty of some serious damage. But just how much is data is your app using?
The amount of data your service chews up depends on the quality settings. For Beats Music, Spotify, and Google Play Music, a high-quality stream maxes out at 320kbps. (Not all tracks are available at that high quality, but most are.)
Pandora is the only big mainstream service we could find that doesn't offer 320kbps streams. In fact, on mobile it maxes out at 64kbps. Lower quality streams obviously use way less data.
So what does that mean in terms of your data plan? 320kbps rate translates to 2.40 MB per minute of audio or 115.2 MB per hour. So if you were to stream music for an entire eight hour work day, you'd burn through nearly 1 GB. If you have a 2GB cap like I do, then this is not an advisable splurge!
Here's a breakdown of a number of the most popular services.
Standard quality: 64kbps
High quality: 320kbps
Normal quality: 96 kbps
High quality: 160kbps
Extreme quality: 320kbps
Three quality settings, with a maximum of 320kbps.
Maximum rate is 64kbps (adjusts automatically depending on your connection).
That's not every service (Apple doesn't publish a spec for iTunes Radio, but it gives you an idea for how much data these services chomp: 320kbps at the top end, 64kbps/128kbps at the low end.)

Thursday, September 29, 2016

Three Excellent Free Music Streaming Apps

[Courtesy of cnet]

Limiting yourself to a handful of major music services is like eating only at chain restaurants: You'll get a good meal, sure, but you'll be missing out on all the little cafes that might be serving up amazing alternatives.
Indeed, it's easy to stick with the likes of Pandora and Spotify, both of which are great at what they do. But consider expanding your streaming-music horizons a bit. There are lots of lesser-known services -- nearly all of them free -- that cater to different tastes.

8tracks

Price: Free
Mobile app: Android, BlackBerry, iOS, Windows Phone
Works in mobile browsers: Yes
Remember Songza? The beloved streaming service Google bought and then shuttered? 8tracks might be the next best thing, but with a decidedly indie bent. You choose your preferred music genre and then a particular artist or mood; the site produces any number of DJ- and user-created playlists that match.
8tracks-screenshot.jpg
8tracks offers a huge variety of indie music, all of it curated into mood- and artist-specific playlists.Screenshot by Rick Broida/CNET
It's a little confusing in spots, because a playlist might have tags indicating a particular artist without actually having any songs from that artist. But the idea is to deliver the kind of music you're likely to like, if not the specific tracks or bands.
You also don't get to see a track list, so you'll have to just sit back and (hopefully) enjoy the playlist ride. You don't have to sign up for an account, but doing so lets you build collections for future listening.
8tracks service supports every platform known to man, and even offers plug-ins for Joomla and WordPress.


Hype Machine

Price: Free
Mobile App: Android, iOS
Works in mobile browsers: Yes
If you like to discover new music by reading blogs and reviews, but realize you're barely scratching the surface of what's out there, head to Hype Machine. It's an aggregator, plain and simple, one that catalogs the most popular songs from blogs around the world.
Each entry includes the number of blogs that mentioned the track and links to various download sources, if available. But you can stream any of the songs just by clicking play, and if you register for an account, you can mark favorites and build your own playlists.
Hype Machine works in mobile browsers, but also has standalone apps for both Android and iOS.

Noon Pacific

Price: Free
Mobile app: Android, iOS
Works in mobile browsers: Yes
Remember mixtapes? Not the hassles of producing your own, but the joy of receiving one from someone else. You can experience that same joy at Noon Pacific, which delivers a new 10-song "mixtape" via email every week. Think of it as a curated version of Hype Machine, with songs handpicked from "the best music blogs," according to curator Clark Dinnison.
noon-pacific.jpg
Noon PacificScreenshot by Rick Broida/CNET
Now years into its existence, Noon Pacific has over 200 playlists you can stream. While listening to any track, you can click to share it on Facebook or Twitter or buy it from Amazon.
Curiously, however, the web and app interfaces don't directly connect you to 8tracks.com, which is where the playlists are hosted. But that's where you have to go if you want to "like" or bookmark a playlist. Thus, you might be better off simply heading to the 8tracks Noon Pacific page and working from there. Or, subscribe to the Noon Pacific mailing list: Each new playlist -- delivered Monday at, you guessed it, noon PT -- sends you to 8tracks.com.

Tuesday, September 27, 2016

Speeding Up iOS 10 on Older iPhones

If you're iPhone is getting warm after upgrading to iOS 10, or otherwise feeling sluggish, there are some simple things you can do to cool it down and speed it up. Just click on the link for an excellent little piece from cnet:

Link to Explanatory cnet Piece

Monday, September 26, 2016

Flavors of India (Phoenix)

Flavors of India is not the best Indian food (the best Indian food is at the Kashmir on Newbury Street in Boston ... the naan with apricot is like the best thing ever), but it is Indian food and, for people who live in Phoenix, the good news is that you can get Indian food there. If you're having a football night party or a debate night party, you can have traditional football night party or debate night party Indian food delivered, but you also can order just for 2 given that you'll easily meet the $15 minimum for deliveries.  The online menu/ordering process is very user-friendly.

Link to FOI Online Ordering Menu

Link to Kashmir in Boston Website

Keyless Door Lock and Amazon Installation

Keyless door locks are a blessing. You never have to worry about losing your key or being locked out, you don't have to worry about forgetting to lock the door on your way out (you can set it to lock itself), and you don't have to worry about having extra keys for guests (you just give them the code or even make up one for them). They cost under $200, and are a snap to program. And you can even arrange for installation at a great price when you order one through Amazon, and you might even find the installer is a general contractor who is licensed as both an electrician and plumber and do almost anything including even installing a new island range hood, a project you've been unable to find anyone to do for years.

The keyless locks come in all styles, but essentially this is what they look like:

Schlage Connect Century Touchscreen Deadbolt with Built-In Alarm, Aged Bronze, BE469 CEN 716

Your island range hood can now look like this:
Image result for island range hoods

instead of like this:
Image result for ge island range hoods

Smoke Alarm Won't Stop Chirping

It's two o'clock in the morning, and you hear a chirping noise. You got looking for it, and finally realize it's the smoke alarm. Your replace the battery, and you think you've fixed it, but it keeps chirping. Because it's the middle of the night and you dare not call your electrician and you don't feel like going to the store to buy new 9v batteries, you go to The Google and quickly learn that, upon replacing the battery, the alarm might need to be re-set to stop it from chirping. The reset procedure will vary depending on the make/model of your smoke alarm, so you might look it up now rather than at 2 am when it next happens. Essentially, though, here is the generic reset procedure:


* Turn off the power to the smoke detector at your circuit breaker.
* Remove the detector from its mounting bracket and unplug the power supply.
* Remove the battery from the smoke detector.
* With the battery removed, press and hold the test button for 15-20 seconds.
* Replace the new battery in the detector and plug in the power supply.
* Restore power to the circuit breaker.
* Reattach the breaker to mounting bracket.

Alternatively: If that doesn't work, go to the hardware store or Amazon and buy a new unit, which will cost between $10 and $30. Be sure you get one that includes adaptors or buy adaptors which are a couple of bucks and will save you a trip back to the store.

If neither of these alternatives work, and if your unit is more than 3 years old there is a very good chance they won't (because the problem is likely the result of dust or old age), you at least now know how to take the alarm off your home's grid, so the chirping will stop while you call your electrician.

Saturday, September 24, 2016

Excellent Review of Free Anti-Malware

[From Gizmo's Freeware]


Introduction
Malware, trojans and threats
Most PCs are now connected to the Internet and networks, making easier the spread of malicious software (malware), which includes trojans (also known as trojan horses), viruses, worms, spyware, adware, rootkits and other malicious or unwanted programs.
Like spyware and adware, trojans can get onto your computer in a number of ways, including: from a web browser; via email; or in a bundle with other software downloaded from the Internet. You may also inadvertently transfer malware via a USB flash drive or other portable media. It is possible that you could be forced to reformat your USB flash drive or other portable device in order to eliminate the infection and avoid transferring it to other machines.
Unlike viruses or worms, trojans do not replicate themselves, but they can be just as destructive. On the surface, trojans appear benign and harmless, but once the infected code is run, trojans kick in and perform malicious functions to harm the computer system without the users' knowledge.
For example, waterfalls.scr is a waterfall screen saver as originally claimed by the author, but it can be associated with malware and become a trojan to unload hidden programs and allow unauthorized access to the users' PC.
Some typical examples of threats by trojans are as follows:
  • Erase, overwrite or corrupt data on a computer
  • Help to spread other malware such as viruses (by a dropper trojan)
  • Deactivate or interfere with anti-virus and firewall programs
  • Allow remote access to your computer (by a remote access trojan)
  • Upload and download files without your knowledge
  • Gather e-mail addresses and use them for spam
  • Log keystrokes to steal information such as passwords and credit card numbers
  • Copy fake links to false websites, display porno sites, play sounds/videos, display images
  • Slow down, restart or shut down your computer
  • Re-install themselves after being disabled
  • Disable the task manager
  • Disable the control panel
To minimise the threats, most PC users will need an effective anti-malware program to remove trojans along with other malware.
Anti-malware and anti-trojan programs
As more computer security developers are extending their product capabilities to address more than one type of malware, the boundary between different types of anti-malware programs is no longer clear-cut and has become blurred.
For example, an anti-virus program such as AVG Anti-Virus covers not only viruses, but offers protection against spyware, adware and others. An anti-spyware program such as SuperAntiSpyware not only detects spyware, but removes trojans, rootkits and other threats. Likewise an anti-trojan program can offer to remove viruses, spyware and other types of malware.
More appropriately, these security products are to be classified as anti-malware programs rather than to be grouped by the name of the products.
In this respect, anti-malware products which are designed to detect and remove trojans more effectively than the others will be reviewed in this category.
How many anti-malware programs do I need to install?
The following extract attempts to answer the aforementioned question and forms part of Gizmo Richards' Support Alert Newsletter, Issue 156, April 2008.
InterviewerSo do you still need an AV program plus an anti-spyware program and an anti-trojan scanner?
GizmoFor the majority of average users the answer is no. A single competent broad spectrum anti-malware product is enough. Of course, not everyone is an average user. Users who engage in high risk activities, like sourcing their software from P2P services, should load up their PC with all the protection they can get. Similarly, there are users for whom the best possible protection is paramount, regardless of cost or performance implications. Finally, users of freeware scanners who cannot afford [and/or are unwilling to pay for] a premium product may be well advised to use more than one signature-based scanner.
Disclaimer
Despite their ratings in this review, some anti-malware programs in certain cases are able to detect more malware than the others depending on their designs, online databases and the infections on computers.
 
Discussion
Emsisoft Anti-Malware is a good choice to scan and remove malware, especially trojans, from your PC. It removes the trojans containing backdoors, keyloggers, diallers and other destructive pests that make it dangerous to surf the web.
Other than trojans, it also can be used to recognize and remove spyware, adware, tracking cookies, worms, viruses and rootkits from your PC.
Designed for ease of use, this program combines Emsisoft Anti-Malware and the Bitdefender Anti-Virus engine to cut down on unnecessary double detection routines for one and the same malware. Prior to version 7.0 Ikarus was employed, but this has now been replaced by Bitdefender because of the former's tendency to produce false positives.
Any suspicious file/s can be uploaded to Emsisoft for analysis: www.emsisoft.com/en/support/submit/ and also, you may find their forums helpful: support.emsisoft.com/
Features such as quarantine, online updates and heuristic scan for unknown malware are included.
From the Emsisoft website, 'By default Emsisoft Anti-Malware installs as a free fully functional 30 day trial version. After the trial period you can either choose to buy a full version license or switch to the limited freeware mode. The freeware mode still allows you to scan and clean infections, but it doesn't provide any real-time protection to guard against new infections'.
In other words, the free version does not provide other features such as file guard, behavior blocker and surf protection.


Malwarebytes' Anti-Malware (MBAM) is an on-demand scanner which can be used to find and remove trojans, along with other malware such as viruses, worms, rootkits, diallers and spyware.

Since the launch of version 2.0, in March 2014, the GUI has benn drastically altered and long-term users' of MBAM might take a while to get used to the new layout. Qiuick scan has been replaced by Threat scan, but the program is still intuitive and simple to use.
As well as ditching the former utilitarian interface, MBAM now has a Progress Scanner bar and the ability to review any detected items during a scan - previously users' needed to wait until the scan had completed to see the items.
As there are daily updates, always ensure the software has been updated prior to scanning your PC. For those of a forgetful nature, you can set the program to warn about the database being outdated.
I would strongly recommend that you tick Scan for rootkits, this can found under:Settings > Detection and Protection > Detection options.
Other features include: multiple-drive scanning; custom scanning; malware exclusions; quarantine (to hold threats prior to deletion or restoration), and application logs.
Another plus point is that MBAM rarely causes any conflicts with other anti-malware utilities. If you encounter problems that are not covered in the help section you can visit the Malwarebytes forum: forums.malwarebytes.org/


SUPERAntiSpyware (SAS) is worth a try as well. In addition to its focus on detecting and removing spyware infections, this program deals with trojans and other types of threats such as diallers, keyloggers,worms, rootkits, etc.
It supports a quick scan, complete system scan or custom scan with trust items and exclude folders. The program also provides an option to check for latest definition updates before scanning to protect you from the newest threats. SAS also has a Trojan Threat List shown here. There are 100 examples of different dll and exe files, all of which should not be allowed to run on your PC. Clicking on any of the items in the list will give you a more detailed description of that particular threat.
Among other features, it includes Hi-Jack Protection which prevents other applications (excluding Task Manager) from terminating the program.
FAQs and help with false positives can be found over at: forums.superantispyware.com/
On the down side, the free version of this program does not support real-time blocking, scheduled scanning and some other features.


Comodo Cleaning Essentials (CCE) contains an on-demand scanner and is portable ie it can run from a USB stick, or a CD/DVD and doesn’t install itself on your hard drive. It employs both heuristic and signature-based scanning and can detect trojans, rootkits and other forms of malware.

I prefer to run CCE. exe from a shortcut on my desktop, but whichever method you choose will work fine.

There are 3 scanning modes in CCE:
  • Smart* – performs a quick scan of critical areas of your PC eg the registry and boot sectors etc
  • Full – a complete scan of all areas of your system
  • Custom – individual files, folders and drives can be added for scanning. Dragging and dropping can also be employed if preferred.
The GUI is very clean and straightforward and during a scan there is a rotating green dial that appears and resembles a radar screen. In the midst of a scan, any malware that is detected can either be cleaned/quarantined, or reported as a false positive to Comodo, or simply ignored if you are fully confident that it is benign.

There is an excellent online help section that can be launched from within the software and is also available here:http://help.comodo.com/topic-119-1-328-3516-Introduction-to-Comodo-Cleaning-Essentials.html

Anybody requiring further help can also take a look at the forums: http://forums.comodo.com
One thing I should draw your attention to is that my CPU temperature rose from 38⁰C to a peak of 58⁰C when scanning my system. Even though an increase in CPU usage, and therefore temperature, is perfectly normal when running security scanning software, some users might find the aforementioned increases rather alarming; you have been warned!
Under Options you’ll find plenty of choices to tweak CCE. Other features include MBR scanner, Virus scanner, CAMAS - Comodo Automated Malware Analysis System (hence the acronym!) and Settings.
From within the Tools section you can access Quarantined Items, Manage Trusted Vendors (whitelist), Import Virus Database, Browse Logs and Check for Updates (manually).
(Also included in CCE are KillSwitch and Autorun Analyzer and both are beyond the remit of this review: suffice to say that the former is similar to the Task Manager in Windows and the latter shows programs and services which run on start-up.)
*Smart scan took just 1m 24secs and when it reached 100% it stated, Your computer will now be restarted in order to scan for hidden services. For more info on hidden services please click on the following link:http://help.comodo.com/topic-119-1-328-3568-smart-scan.html
In conclusion, CCE has become a welcome addition to my security toolkit and, aside from the aforementioned CPU issues, I recommend folks to at least give it a try. After all, you don’t even need to install the application!

Thursday, September 22, 2016

"Protecting" Kids From Naughty Apps

[From the NYT]

You can set parental controls for the Google Play store within the Google Play app for Android. While setting these restrictions may not prevent your children from seeing prohibited content that comes from a direct web link to the material, the filters should work within the Google Play app. (If you have multiple Android devices you want to police, you must configure the parental controls settings on each device.)
To set restrictions, open the Google Play app and tap the three-line menu icon in the top-left corner. Select Settings and then Parental Controls. Tap the button to turn on Parental Controls.
Photo
You can find the parental controls tools in the settings for the Google Play store app.CreditThe New York Times
Next, create a passcode, then set your limits. For apps and games, you can choose a specific content rating for programs that can be installed on the device. Movies and television shows can be restricted based on the standard industry content ratings like PG-13 for films, or TV-14 for shows. You can also block the purchase of music tracks and e-books tagged as “Explicit.”
Amazon’s Kindle tablet hardware, which runs a variation of the Android operating system, has a parental control system for videos and other content in the Settings area. Many Amazon devices include FreeTime software that allows parents to control the apps that can be used, and the amount of time the child can use the tablet.
Apple’s system software includes a similar Restrictionsfeature for iPhone, iPad and iPod Touch devices. To use it, tap the Settings icon on the Home screen, go to General and select Restrictions.

Windows 10 Advantage

Although our Computer Department continues to say, if you like your Windows 7 computer, just stay with it and do not upgrade to Windows 10. That said, our Innovation Research Department has found the first Windows 10 advantage worth mentioning. Thanks to the recent Windows 10 Anniversary Update, you can now get Android notifications on your Windows 10 PC.  This feature works through Cortana and the Cortana app for Android (there's a Cortana app for iOS, but iOS doesn't support this kind of fancy notification-mirroring). Once set up, yourWindows 10 action center will be able to tell you when you miss a call, receive a text or have a low battery on your Android phone. You will also be able to receive app notifications from any app you have installed, and you can even control your phone via your computer with voice commands -- for example, you can say "Hey, Cortana, find my phone," and Cortana will locate your phone on a map.

Heart Pacemaker App

[Prefatory Note: Even our crack Medical Department ("MD") does not give medical advice nor should any reader rely on anything in this blog concerning medical treatment. However, a recent survey of our readers shows an increase in their having implantable heart pacemakers. So, our MD Chief has decided to publish this post. Of course, if you are having a medical emergency, please stop reading this post and dial 9-1-1]

As proof that "there is an app for that," for over a year now, there has been an app for implantable heart pacemakers. In short, MyCareLink Smart(TM) Monitor is an app-based remote monitoring system for patients with implantable pacemakers. With the MyCareLink Smart Monitor, patients with a Medtronic pacemaker can use their own smartphone or tablet technology, with cellular or Wi-Fi service, to securely transmit data from their pacemakers to their physicians, who can then interpret the data to make treatment decisions. The link below gives a full description of the Medtronic technology. The technology might have moved on since the Medtronic announcement.

Link to Medtronic Description of MyCareLink Smart

FedEx Warning

If you hand a package to a FedEx driver, and he or she is kind enough to take it, do not panic if you do not "see" it in the FedEx tracking system that same day, even if it's a return of a cable box to Cox who will charge you $400 or more if the box is not received by them and there's no proof FedEx ever got its, and even if the first FedEx rep you talk to tells you FedEx does not have the box and it has no way of knowing who the driver was, at which point of course you should ask to speak to a supervisor who will confirm FedEx can determine who the driver is and she will assure you that she will contact the local center to see if they can find the box and she will give you the number of the local center, and again don't panic when the local center can't find the box, because, as it turns out, the driver often will not return to the local center where the first scan will take place until the next day because he normally does not have boxes to deliver. All that said, it is safer to give the box to a FedEx place and get a receipt which in effect will be the first scan and you won't have to go through a whole day of panic.

Wednesday, September 21, 2016

Self-Lacing Running Shoes

How many times have you gotten ready to take a run or walk with someone and they are ready before you are, and you find yourself under unbearable pressure to lace up your running shoes and put to an end the other person's pacing and making of gutteral noises. If anyone doubted that the technological advances are making our lives demonstrably easier and better, Nike's self-lacing shoes will put that canard to a rest. They'll be here in time for Xmas. Is this a great country or what?

Link to Short You Tube Video Showing Nike Shoe Self-Lacing

Tuesday, September 20, 2016

Travel Tip for Whale Watchers

If you go to Ogunquit (Maine), do not do the whale watching trip. You will spend 4 hours bobbing up and down, you will not see one whale, and your major entertainment will be watching many people dealing with sea sickness. In contrast, if you go to Provincetown, you're in for a whale watching treat:


Monday, September 19, 2016

Corruptibility of Outlook Ribbon Buttons

Not only can FIFA officials be found to be corrupt, or politicians, but Outlook Ribbon Buttons can corrupt as well. For example, if you have a New Appointment button on your ribbon (and there's good reason to and no reason not to), but filling it out and hitting Save and Close does not result in the new appointment appearing on your calendar, see if the New Appointment box in the calendar itself works. If so, remove the ribbon button and add it back in again. If that doesn't do the trick, check The Google, but be warned, The Google will give you a plethora of other suggestions, many of which are stupid, wrong, or cumbersome.

Sunday, September 18, 2016

Easy Windows Configuration Utility

[Courtesy of Gizmo's Freeware]
Every time Microsoft releases a new version of Windows, they seem to make the configuration option screens even harder to find. Windows 10 is no exception, and you probably find yourself continually using the search facility in order to work out how to change something as simple as the display resolution.
Ultimate Settings Panel is a rather neat utility which is actually nothing more than links to all of the key Windows configuration screens. Having all of these links in one place is really useful. Plus, it also knows about key browsers such as Chrome and Firefox, and includes buttons that will launch these in various modes such as the kiosk setting.
Ultimate Settings Panel is available for free in a Lite version, and is also portable so there's nothing to install. Just download it and unzip it, then run the program.

Link to Ultimate Configuration Download

Application Windows Cannot Be Moved or Resized

All of a sudden, you cannot resize or even move your application windows. You can spend a couple of hours on The Google and try eveything they suggest and even try installing a program to do so. When none of those efforts work, you can try restoring the computer to increasingly older restore points. You can get really frustrated. Or, you can turn off and turn on your mouse, and the problem just might be solved. You won't find that solution in The Google. It was discovered by our Creative Solutions Department. In essence, it's a variation on the first rule of computer troubleshooting: Reboot (in this instance, reboot the mouse).

Saturday, September 17, 2016

Finally: Affordable Private Aviation

If you think that private aviation is only for the super rich, Wheels Up is a welcome surprise. For an initial memberships fee of just $17,500 and an annual fee thereafter of just $7,500, you can fly on your own private plane for only $4,000 per hour. Your flight is guaranteed 24/7/365 with just 24 hours notice. At last, private aviation for the rest of us.

Link to Wheels Up Website

Spotting Spam

Spammers are becoming increasingly sophisticated. It is sometimes nearly impossible to know if a given email is spam or legitimate. Our crack Security Department (SD) has some useful tips based on an email that recently arrived in the SD chief's inbox. Here is the text of that email:

"I am Vineet Manish.I have an scheme that might interest you, this scheme arose from the Government of Malaysia reserve vault under our care, from which we pay both Indigenous and foreign executed contract and Sub contract Payments. I need you to stand as a successor to the sum of $20,000.000.00 (Twenty, Million United States Dollars.

"All modalities are in place to register it as a diplomatic Sub contract payment, which shields  it from unnecessary stop orders from several international fund transfer regulatory and monitoring agencies, that usually place holds on huge fund transfer in order to request a certain percentage of the fund as fund transfer certification clearance.

"l advise you to send the following details below to my private email: manishvineet@yandex.com
A: Your Full name B: Your House Address C: Your direct telephone number D: Age E: Occupation.F: Gender."

In case you missed them, here are the giveaways:

1. "Sub" is not typically capitalized.

2. The comma between "Twenty" and "Million" reflects a sloppiness typical of spammers.

3. Either the comma after "agencies" is wrong or "that" should read "which."

4. Strunk & White frown on "in order to" as unnecessarily redundant verbiage that legitimate emails shy away from.

5. Most legitimate email will not ask for your gender.

*    *     *

Guaranteed 3.5% Return and No State or Local Taxes Upon Redemption

[Prefatory Note: As a courtesy to our ever increasing senior readership, be aware that this article, while interesting in itself, likely has no relevance to your investment needs. But for our ever increasing younger professional readership, this article explains what looks to be a very attractive and safe investment that should fit in nicely with your long-term savings strategy]

[From the WSJ]

If someone offered you a guaranteed 3.5% return for 20 years, you’d probably be tempted either to sign up right away or call the cops to arrest the guy for securities fraud.
But the guy offering this deal is Uncle Sam, and you should neither barge in nor run away screaming. You should look closer, because this offer from the U.S. Treasury is legitimate and highly attractive, although it isn’t right for everyone.
The government guarantees that if you hold Series EE savings bonds for 20 years, you will get back twice the amount of money you put in. That translates to a return averaging a whisker more than 3.5% annually. A 20-year U.S. Treasury bond, meanwhile, yields about 2.1%.
In today’s yield-starved world, a 3.5% return sounds almost like manna from heaven. Is there a catch? Of course there is — several, in fact.
First, and worst, that 3.5% return isn’t protected against inflation. And you will earn that rate only if you hold on for the full 20 years; until then, interest accrues only at the current rate of 0.1% annually.
So the savings bond is comparable to a zero-coupon bond, which pays no current income but distributes all its accrued interest in a lump sum when it matures.
You can redeem, or cash out, only through the U.S. Department of the Treasury’sTreasuryDirect.gov website. You generally can’t redeem savings bonds the first year you own them and, if you cash out within the first five years, you will forfeit the last three months of interest. (That’s not much of a penalty at this point, though, at 0.025%.)
Finally, interest rates could take off between now and 2036, making that 3.5% look a lot less appealing.
But savings bonds can still make a powerful addition to a portfolio.You can’t use savings bonds for all your fixed-income needs, because they aren’t liquid or inflation-protected. And you can invest only $10,000 in EE savings bonds per Social Security number each year; if you’re married, you and your spouse together can buy $20,000. For wealthy investors, that is chicken feed.
“I think this is one place where a small investor has a big advantage over the institutions,” says Robert Axelrod, a 42-year-old psychiatrist in Longview, Wash., who has been investing in the bonds for the past three years.
To get a 3.5% yield, an institutional investor has to buy bonds that aren’t issued by the U.S. Treasury — and to incur the risk of not getting paid back, the risk of severe loss if interest rates go up, or both.
For an individual, says Dr. Axelrod, the rate on EE savings bonds is “so much better than anything else out there, pretty much risk-free, that it’s unbeatable.”
The savings bonds are “roll-your-own annuities,” says Mel Lindauer, a private investor in Daytona Beach Shores, Fla., who moderates Bogleheads.org, a non-profit website that provides investment education and analysis.
Better yet, they are annuities that come without any worry that the issuer could go bust or that your heirs won’t inherit the money. And after year five, you can redeem without penalty.
David Loeb, a nurse in St. Louis, puts $6,000 annually into EE savings bonds. He knows that will turn into $12,000 two decades later, supplementing his Social Security and the pension he will get from the hospital where he works.
“I like the idea of using it to cover a small portion of my future needs,” he says, “and it helps me stomach the fears elsewhere.”
An ideal use, says Mr. Lindauer, is to help you to defer taking Social Security. A rule of thumb is that each year you delay retirement and the onset of your Social Security payments will increase your benefits by 8%. If you buy a $10,000 savings bond each year starting at age 42, you assure yourself $20,000 in annual income beginning at age 62. That can help tide you over until you reach 70, when Social Security payments max out.
Furthermore, you may use EE savings bonds to pay for higher-education costs, tax-free, if you earn no more than the limits then in force, currently about $92,000 if you’re single and $145,000 if you’re married. Be sure the bond is registered in one or both of the parents’ names, not the child’s name. It can pay for college costs only in the same tax year in which it is redeemed.
You can elect to pay tax on the accrued income as you go, but many investors wait until it’s distributed at maturity 20 years after purchase.
The income is free of state and local income tax, although it is federally taxable at ordinary income rates.
There ain’t no such thing as a free lunch,” the old saying goes. The 3.5% return on EE savings bonds “might not be a free lunch,” says Mr. Lindauer, “but it’s at least dessert.”