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by: Leah Keating
Not earning enough interest on our savings/checking accounts? Losing money in the Stock Market? The U.S. Department of the Treasury issues savings bond to help pay for the U.s Government’s loan needs. Not all the money spent by the U.S. Government comes from taxes.
Savings bonds are considered debt securities and are 100% backed and secured by the U.S. Government, which means that even if they are lost, stolen, or destroyed, they can be replaced. Each Savings Bond is registered with the U.S. Treasury Department bureau of the Public Debt.
Savings bonds are sold in Series EE and I.
Series EE
• Purchased at a discount fo half their face value
• Purchase up to a maximum of $5,000 during a calendar year
• Increase in value as the interest accumulates up to 30 years
• At maturity or when they come due, you will receive the original amount you paid, plus any interest that has been earned.
• As of May 1, 2005 they will earn a fixed rate of return
• Available for purchase from most financial institutions or participating employers’ payroll deduction
• Sold in denominations of $50, $75, $100, $200, $500, $1,000, $5,000, and $10,000
Series I
• Purchase only at face value
• Grow with the inflation-indexed earning for a maximum of 30 years.
• Purchase up to a maximum of $5,000 (face value) during a calendar year
• Sold in denominations of $50, $75, $100, $200, $500, $1,000, and $5,000
You may become a bond owner if you have the following:
• Social Security Number
• Resident of the United states
• United States Citizen living abroad with an U.S. Address of record
• Minor (under the legal age of 18)
• Civilian employee of the U.S. regardless of residence.
Interest earned on Savings Bonds, are only subject to federal taxes, either at the time you cash them in or when they stop earning interest. They are 100% exempt from state or local taxes.
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