U.S. Savings Bonds
What Are U.S. Savings Bonds?
U.S. savings bonds are government-issued debt securities designed primarily for individual investors. These bonds allow individuals to lend money to the U.S. government in exchange for interest earnings over time.
Savings bonds are often used for long-term savings goals.
Why It Matters
U.S. savings bonds provide a relatively safe investment backed by the U.S. government. They are accessible to many investors because they can be purchased in smaller amounts and held for long-term savings.
Some savings bonds also offer tax advantages depending on how they are used.
How U.S. Savings Bonds Work
Savings bonds are purchased directly from the U.S. Treasury.
Two common types include:
- Series EE savings bonds
- Series I savings bonds
Interest accumulates over time and the bond reaches full value at maturity.
Example
An investor purchases a Series I savings bond to protect savings from inflation over the long term.
U.S. Savings Bonds vs Treasury Bonds
- Savings bonds are designed mainly for individual investors.
- Treasury bonds are often purchased by institutions and large investors.
FAQs About U.S. Savings Bonds
Are savings bonds safe investments?
They are backed by the U.S. government and considered low risk.
Can savings bonds lose value?
They generally do not lose principal value if held to maturity.
Where can investors buy savings bonds?
They can be purchased through the U.S. Treasury’s TreasuryDirect website.
Related Terms
