U.S. Savings Bonds. Untapped financial long-term resource.

AI Summary

 

U.S. savings bonds are government-backed securities designed to help individuals save money while earning interest. They are issued by the U.S. Department of the Treasury.

Types of Savings Bonds

• Series EE Bonds: These are purchased at face value and earn a fixed interest rate. They double in value after 20 years if held to maturity.
• Series I Bonds: These offer a combination of a fixed rate and an inflation rate, protecting against inflation. The interest is compounded semiannually.

Purchase and Redemption

• How to Buy: Savings bonds can be purchased online through the TreasuryDirect website or at banks (for paper bonds).
• Redemption: Bonds can be redeemed after 12 months, but cashing them in before five years results in a penalty of the last three months' interest.

Tax Benefits

• Interest earned on savings bonds is exempt from state and local taxes. Federal taxes can be deferred until the bonds are redeemed or reach maturity.

Usage

• Savings bonds are often used for education savings, as they can be redeemed tax-free for qualified education expenses if certain conditions are met.

Limitations

• There are annual purchase limits: $10,000 per person for electronic Series I and EE bonds, and an additional $5,000 for paper bonds using your tax refund.

For more detailed information, visit the U.S. Department of the Treasury's official website or TreasuryDirect.