Saving Bonds are issued by US Treasury Department. These are not
tradable anywhere in the market. The bonds are non-marketable
securities. For any buying and selling activity, you need to go
to the agents authorized by the government. These agents are
called Issuing and Paying agents. The saving bonds are
registered securities. This means that they are registered and
held in name of the person who owns them.
Generally there are three series of interesting saving bonds.
They are, I Series, E/EE series and H/ HH bonds.
Series EE Bonds : They replaced the Series E bonds. You can
easily buy the EE bonds at a discount of half their face value.
They come in denominations of $50 to $10,000. There is however a
limit. There is a ceiling of $30,000 (on the face value) during
any calendar year. These bonds increase in value as the interest
accrues / accumulates. They will generate for you interest for
30 years. When EE bonds "mature," or are due for maturity, you
get your original investment back plus all of the interest also.
They are the accrual type of marketable securities.
Series HH Bonds: They are available for purchase only in
exchange for Series EE or E bonds and Savings Notes. The other
way is to procure the proceeds from a matured Series HH bond.
They are quite different from the usual EE bonds. Series HH
bonds are purchased at their face value and are available in
$500 to $10,000 denominations. But there is no upper limit on
the amount you can invest. These bonds don't increase in value
and have a maturity period of 20 years.
Series I Bonds : These bonds are available at face value only.
They grow with inflation-indexed earnings for maximum period of
30 years. You can buy Series I bond in $50 to $10,000
denominations, the limit being $30,000 in any calendar year.
Bonds and Series EE Savings Bonds are of similar type as they
are accrual securities. They will give you some earning, that
is, accrue interest monthly at a variable rate and the interest
is compounded semiannually. You receive your earnings when you
redeem an I Bond or Series EE Savings Bond.
Series HH Savings Bonds are current income securities. You
receive your earnings semiannually and you receive the face
value of Series HH Savings Bonds when you redeem them.
The benefits of parking some savings in these saving bonds is
two way: first you get a cut in the taxes thereby some tax
benefits are there. The other benefit is that they are more
secure then other securities as their value almost always rises.
It never fluctuates much so the usual ups and downs that other
securities see, is not a regular feature in this bond.
Another great thing is that they are registered securities so in
case you loose these bonds (paper bonds etc), all you have to do
is get in touch with the authorities ands you will get a
replacement soon. Thus there is no issue of their being lost,
destroyed etc.
The bonds are very affordable as you can start purchasing them
with as less as USD 25.The bonds are available right from
denomination of USD 50 to USD 10,000.So all you have to do is to
analyze your needs, financial goals and then purchase them.
In case you are tied up, no need to fret, these bonds are
valuable online also. So all you have to do is few clicks on the
site and you have bought them electronically, without moving
anywhere from the comfort of your chair. There more then 40,000
financial institutions that sells these bonds.
You can sell them anytime you wish to, once the initial holding
period of 12 months is over.
Saving Bonds are safe and secure securities to park savings for
good returns. They are easy to buy and come in small as well
large denomination also.
About the author:
Bonds Resources and the
latest news and information around it.
