U.S. Savings Bond Types - EE Savings Bonds, Series I Bonds, Series E Bonds
by Mike Singh
Thousands of people across the country are invested in the U.S.,
not just legally through taxes, but by choice through U.S.
Savings Bonds. A savings bond is a note that is issued by the
government to recognize that they owe the buyer money, in
essence the people of the United States who buy Savings bonds
are loaning the government money. The government, in turn, has
agreed to pay the lendee back within a certain period of time at
a particular rate of interest.
EE Saving Bonds
EE bonds are very popular U.S. savings bonds. These bonds are
not transferable and gather interest for up to thirty years
after the issue date, so they make good gifts for family or a
good method to begin a savings for children, as there is a
penalty for cashing the bond within the first five years. Some
more interesting facts about EE bonds:
* They come in denominations of $50 , $75 , $100 , $200 , $500 ,
$1,000 , $5,000 and $10,000. * They were first issued in January
1980 * They are purchased at half of their face value and accrue
interest until they are cashed, up to 30 years. Series E Bonds
These savings bonds are also known as 'War bonds' because they
were issued starting in May of 1941. E bonds were replaced by EE
bonds in 1980 and were the longest running bonds available to
American investors. They come in denominations ranging between
$25-$10,000, and they are also non-transferable. Some issuing
facts:
* They are purchased at 75% face value * Bonds purchased between
1941-1965 carry their interest for up to 40 years * They have a
guaranteed mimimum investment yield of 4 percent compounded
semiannually for those with maturity periods after March 1,
1993.
Series I Bonds
I bonds are relatively new, having been issued first in 1998.
They were issued to protect investors from inflation, and therby
have a unique interest rate calculation based on the inflation
rate and the fixed interest rate that the government sets twice
yearly. I bonds can be purchased in denominations that range
from $50 to $10 and are purchased at face value. They accrue
interest monthly and compound interest for up to thirty years.
Other interesting facts about I bonds:
* They can come in book-entry or definitive form * Can be
purchased through banks or through your employer * investors
cannot exchange I bonds for HH bonds * They must be held for a
minimum of 12 months
About the author:
On http://www.bond-trading.org/ read about california municipal bonds and is it safe to invest in corporate bonds.
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