The Ins, Outs, and All-Arounds of US Savings Bond

In particular, US savings bonds combine the stability of a fixed-income investment with the confidence of investing in one of the most financially stable governments in the world.

The returns on savings bonds don’t always measure up to those of riskier securities, but they offer far more than their cash return alone. With their modest-but-reliable interest rates, unique tax advantages, convenience, and income possibilities, savings bonds are excellent tools for consistent wealth-building.

Investing in Savings Bond

When you buy a bond, you invest in corporate or government debt. The bond’s purchase price amounts to a small loan to the institution that issued it.

For several reasons, many investors prefer to keep a portion of their portfolios in bonds. Bonds facilitate cash flow into a portfolio as an investment that primarily offers income instead of growth.

Advantages of Savings Bond

Types of Savings Bond

The US Treasury currently offers two types of savings bonds, series EE and series I. The two are pretty similar in practice.

Series EE bonds last for 30 years. They have a guaranteed fixed interest rate for the first 20 of those 30 years. During the final ten years of the term, the interest rate on EE bonds may change but won’t necessarily do so.

Series EE Savings Bond

The most significant difference between EE and I bonds is how they earn interest. While EE bonds earn a fixed rate for the first 20 years, I bonds earn variable interest rates tied to inflation.

Series I Savings Bond

What Are My Savings Bonds Worth?

If you already own savings bonds and want to find their present value, the answer will depend on whether they are paper or electronic.

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