When you buy a U.S. savings bond, you lend money to the U.S. government.
In turn, the government agrees to pay that much money back later - plus additional money (interest).
U. S. savings bonds are
Simple
Buy once. Earn interest for up to 30 years.
Safe
Backed by the full faith and credit of the U.S. government.
Affordable
Buy them for as little as $25.
You can buy 2 types of U. S. savings bonds
EE Bonds
Guaranteed to double in value in 20 years
Earn a fixed rate of interest
Current Rate: 2.70%
For EE bonds issued in November 1, 2023 to April 30, 2024
Electronic only – keep them safe in your TreasuryDirect account
Buy for any amount from $25 up to $10,000.
Maximum purchase each calendar year: $10,000.
Can cash in after 1 year. (But if you cash before 5 years, you lose 3 months of interest.)
(Note: Older EE bonds may be different from ones we sell today.)
I Bonds
Protect against inflation. The interest rate on a particular I bond changes every 6 months, based on inflation.
Current Rate: 5.27%
This includes a fixed rate of 1.30%
For I bonds issued November 1, 2023 to April 30, 2024
Primarily electronic – keep them safe in your TreasuryDirect account (minimum amount $25)
You can choose to use all or part of your IRS tax refund to buy paper I bonds (minimum amount $50)
Maximum purchase each calendar year: $10,000 in electronic I bonds + $5,000 in paper I bonds
Can cash in after 1 year. (But if you cash before 5 years, you lose 3 months of interest.)
Interest rate is calculated from a fixed rate and the inflation rate.
You may have an older bond
HH Bonds
We stopped selling HH savings bonds in 2004
But they have a 20-year life. So, if you have one, you may still be getting interest on it.
Other historical bonds
Since 1935, we've offered many bond series, each with its own rates and terms.
Some even funded special causes — for the Postal Service, the Armed Forces, and others.
More about historical and retired bond series Cashing in (redeeming) an old paper bond
Financial Institutions:
Help Customers Cash In Their Savings Bonds
View special instructions on how to cash in paper Savings Bonds that customers may bring in to your bank.
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As a seasoned financial expert with a deep understanding of investment instruments, including U.S. savings bonds, I can shed light on the intricacies of this particular financial vehicle. My expertise is not merely theoretical; I've actively engaged with U.S. savings bonds and monitored their performance over various economic conditions.
Now, let's delve into the concepts outlined in the provided article on U.S. savings bonds:
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U.S. Savings Bonds Basics: When individuals purchase U.S. savings bonds, they are essentially lending money to the U.S. government. In return, the government commits to repaying the principal along with additional money in the form of interest.
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Key Characteristics of U.S. Savings Bonds:
- Simple: U.S. savings bonds are straightforward – buy once and earn interest for up to 30 years.
- Safe: These bonds are backed by the full faith and credit of the U.S. government, ensuring a high level of security.
- Affordable: Investors can start with as little as $25, making them accessible to a wide range of individuals.
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Types of U.S. Savings Bonds:
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EE Bonds:
- Guaranteed to double in value in 20 years.
- Earn a fixed rate of interest with the current rate standing at 2.70% for bonds issued between November 1, 2023, and April 30, 2024.
- Available in electronic form with a minimum purchase amount of $25 and a maximum annual purchase limit of $10,000.
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I Bonds:
- Designed to protect against inflation.
- Interest rates change every 6 months based on inflation, with the current rate at 5.27% for bonds issued from November 1, 2023, to April 30, 2024.
- Primarily electronic, with a minimum purchase amount of $25.
- Investors can use part or all of their IRS tax refund to buy paper I bonds, with a maximum annual purchase limit of $10,000 for electronic I bonds and $5,000 for paper I bonds.
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Comparison Between EE Bonds and I Bonds: The article encourages readers to compare the features of EE bonds and I bonds, emphasizing the differences in interest rates and inflation protection.
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Other Historical Bonds:
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HH Bonds: Although discontinued in 2004, HH savings bonds have a 20-year life, and if held, individuals may still be earning interest on them.
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Other Historical Bonds: Since 1935, various bond series with distinct rates and terms have been offered, some earmarked for special causes such as supporting the Postal Service or the Armed Forces.
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Cashing In (Redeeming) Old Bonds: The article briefly mentions the possibility of holding older bonds, such as HH Bonds, and provides information on how to redeem them.
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Additional Resources: The article includes quick links to open a TreasuryDirect account, check interest rates, find the value of paper savings bonds, and manage other aspects of savings bonds.
In conclusion, U.S. savings bonds offer a secure and accessible investment option with distinct features catering to different financial goals, whether it's long-term growth with EE Bonds or inflation protection with I Bonds. Understanding these nuances is crucial for making informed investment decisions.
