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.
The Ontario Savings Bonds program is part of the government's economic plan for Ontario.
Growing your savings with savings bonds or other Treasury securities is affordable, safe and convenient - and you don't need a lot of money to get started.
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.
The federal government is clearly moving toward a more efficient and cost-effective management of the popular savings bond program.
Series EE savings bonds earn 90% of five-year Treasury securities yields.
Savings bonds are safe and secure, you don't have to worry about losing money on them," said Thelma Jones, DOD Savings Bond campaign program manager.
Treasury's savings bond offerings today consist of series EE bonds, the interest earnings on which accrue until the bond matures or is redeemed, and series HH bonds, which are obtained in exchange for series E or series EE bonds and pay interest twice per year, via ACH, to the owner's designated depository institution.
Savings Bonds are going electronic after December 31 aO a move that will save taxpayers $120 million over five years.
If you have old Series E savings bonds or plan on buying savings bonds tot education or retirement, figuring out how much those bonds are worth or how to purchase new ones just got easier.
In this area, the Federal Reserve System has managed several initiatives for the Treasury to improve long-term efficiency in Treasury securities and savings bonds and to improve the quality of service to the public.
Department of the Treasury looks forward to helping families preserve this tradition of savings bond gift-giving for generations to come.

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