What are savings bonds?

Savings bonds are government bonds offered in the U.S. The government sells savings bonds to help fund spending on federal programs like social security, public schools, and more.

When the government sells savings bonds, it is like taking a loan from the public. Savings bonds are sold at a discount and reach their full value over a fixed period. When the bond reaches maturity, the investor will recoup the bondโ€™s earnings.

For instance, a Series EE savings bond is sold at 50%. The savings bond will mature to its total value over 20 years. This gives investors a secure way to double their money over time.

Investors like savings bonds because they are not subject to state and local income taxes. Investors also like savings bonds because they are a predictable way to earn money. Because of this, savings bonds are a great way to build retirement funds.

How do I use the savings bond calculator?

The savings bond calculator above will tell you the expected profits from selling your savings bonds. You must input the savings bond type, the amount you invested, and how long you have held the savings bond. From here, you can understand your expected profits and ROI from selling your savings bonds.

Can savings bonds lose value?

One of the main benefits of savings bonds is that they canโ€™t lose their value. The interest rate on savings bonds canโ€™t go below zero. This means that the savings bond gains value yearly until it reaches maturity.

Further, the government cannot deny the value of savings bonds. Investors will always be able to cash in their savings bonds.

The drawback of savings bonds is that they gain value at a fixed rate. Despite market conditions and interest rates, savings bonds only mature when theyโ€™re supposed to. So while savings bonds cannot lose value, they cannot gain value faster.  

Where can I buy savings bonds?

Savings bonds are easy to buy. You can buy savings bonds at banks, credit unions, and from your employer. You can also purchase savings bonds through the U.S. Department of Treasury.

Savings bonds are a popular gift for younger people. Many people gift savings bonds to provide future funds for the individual.

Investors also suggest using savings to build a retirement fund. Because you know the date and amount of returns on savings bonds, they provide a reliable way to make a retirement fund.

What savings bonds are the best to buy?

The U.S. Treasury offers two types of savings bonds: EE and I. EE and I bonds can be bought electronically or at your local bank. Investors can only buy $10,000 of each type of bond per year.

The main difference between EE bonds and I is how they earn interest. EE bonds earn a fixed interest rate and are guaranteed to double in value in 20 years. I bonds earn a variable rate of interest. Thus, I bonds are affected by inflation. As inflation rises, the value of the bond increases.

Experts recommend buying EE bonds because they have a predictable outcome. No matter what, EE bonds will double your investment in 20 years.

I bonds have the potential to return greater or lesser returns than EE bonds. Riskier investors may prefer I bonds if they believe inflation will rise faster than usual. If inflation is predicted to grow faster than the fixed interest rates associated with EE bonds, you may want to buy I bonds.

Can savings bonds be transferred to another person?

When you buy a savings bond, you can put down one or two owners on the bond. Only a listed owner of the bond can cash the bond.

Savings bonds can be transferred to another person. You must issue a request to the U.S. Treasury Department to do this. You must wait five business days after you buy the bond before you make any ownership changes.

Where can I cash savings bonds?

Savings bonds can be cashed at any bank you have an account. Most banks only cash savings bonds for customers who have had a bank account for at least six months.

Savings bonds can also be redeemed at the U.S. Department of Treasury. You can send your savings bonds to the Treasury Retail Securities Services and the proper forms. Afterward, the Treasury will mail you a check with your returns.