savings bond

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Savings bond

A government bond issued in face value denominations from $50 to $10,000, with local and state tax-free interest and semiannually adjusted interest rates.

Savings Bond

In the United States, a non-tradable bond issued by the federal government for savings purposes. A savings bond allows citizens to receive a guaranteed return for their investments and helps raise revenue for the government. There are two types of savings bond in the United States: Series EE and Series I, with the main difference being that Series I bonds have interest rates indexed to inflation. Savings bonds pay coupons semi-annually; they are sold at face value and pay par upon maturity, which is 30 years after purchase. Bonds not held for at least five years are subject to a redemption penalty. Federal taxes on interest are deferred until redemption or maturity. Savings bonds are non-transferable and must be either held or redeemed.

savings bond

A nonmarketable security issued by the U.S. Treasury in relatively small denominations for individual investors. Three categories of bonds are available. Interest on these bonds is exempt from state and local, but not federal, taxation. Also called United States savings bond. See also Series EE savings bond, Series HH savings bond, Series I savings bond.
Do U.S. savings bonds have a place in a portfolio?

Probably not, at least for most serious investors. Higher yields are available in various other government obligations that also offer marketability with no penalties if you want your money. TIP: For a beginning investor or for individuals of modest means, U.S. savings bonds are often a better investment than certificates of deposit, because taxes are not due until the bonds are redeemed.

Thomas J. McAllister, CFP, McAllister Financial Planning, Carmel, IN
References in periodicals archive ?
Singapore Savings Bonds are a new type of government bond, which will be launched as part of moves to make low-cost investment options more widely available to retail investors.
My parents, and likely many others of their generation, are no longer giving savings bonds to children.
Savings bonds can be purchased for as little as $50 up to $5,000, and the buyer is not required to hold a bank account.
Series I savings bonds as one of the (up to) three accounts.
Practitioners should be aware that this election applies to all savings bonds owned by the taxpayer at the beginning of the tax year, as well as those purchased during the tax year and in the future.
History of the United States Savings Bond Program (Washington: September
A Series I savings bond may be redeemed anytime after six months for issue dates of January 2003 and earlier.
The second is to evaluate two important income withdrawal strategies available to households looking for low-risk retirement income: the purchase of fixed annuities and planned withdrawals of savings bond investments.
savings bond and second-place winners receive a $5,000 U.
The first place winner, his or her parents and teacher will receive an expense-paid trip to Nebraska City, NE, where they will participate in the National Awards Weekend in addition to receiving a $1000 savings bond mid a lifetime membership in the NADF.
Savings Bonds coordinators and canvassers from the Office of the Secretary of Defense (OSD) kicked off a savings bond campaign during a recent ceremony at the Pentagon.

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