What is a Savings Bond?

Last Updated: February 26, 2019 | by Jackie Brahney | reviewed by Jack Quinn

US Savings Bonds are non-marketable securities, meaning you cannot buy or sell them unless you are an authorized issuing and redeeming agent designated by The US Treasury Department. They are also considered registered securities – which means that the person or persons named on the bond owns them.

U.S. savings bonds are debt securities issued by the U.S. Dept of Treasury to help pay for the U.S. government’s spending and borrowing. They are considered “one of the safest investments” because they are backed by the full faith and credit of the U.S. government.

Who Issues US Savings Bonds?

The US Treasury Department issues Savings Bonds.

Advertisement

Why people buy US Savings Bonds.

There are several reasons why Americans buy Savings Bonds. Often safety is cited as a primary reason. Savings Bonds are backed by the full faith and credit of the United States Government, therefore, the principal and interest will never be lost due to changes in the financial markets. Savings Bonds are free from ALL state and local income taxes. You can defer federal income taxes on the earnings if you wait until the bond reaches final maturity or when you cash it in. You can invest as little as $25 (and even smaller amounts from Payroll Deductions Plans), so it is an easy way for Americans to save. Some Savings Bonds are even entirely Federal Income Tax Free if used for Educational Purposes.

Where to buy US Savings Bonds?

Currently there are three types of bonds available for purchase: Series EE, Series I, and the Patriot Bond (first issued on December 11, 2001 – the 3 month anniversary of the WTC/terrorist attacks) – following all the same rules and regulations of an EE bond. In the past, you could only purchase Savings Bonds at your local bank, but with the internet and the popularity of digital purchasing, Savings Bonds are now available via the Internet. Learn more about buying electronic savings bonds.

We hope this answered a few questions surrounding, “What is a savings bond?”, If you would like to learn more about savings bonds, explore our website, check out ourĀ savings bonds blog, or contact us with any questions that you may have.

Advertisement

Savings Bonds Currently Available for Purchase

  • EE Bonds
  • I Bonds
  • Patriot Bond

Created on: February 13, 2019

Follow us

Jackie Brahney

Marketing & Editorial Director at SavingsBonds.com
Jackie Brahney is the Marketing and Editorial Director and most notably, an U.S. Savings Bond Expert for SavingsBonds.com. Since 1991, she has done extensive research on savings bonds and state of the art savings bond valuation systems, and heads the company's public relations and marketing initiatives.
Follow us