Investing in U.S. savings bonds is a simple and easy way to put your money to work and start saving. This guide to investing in U.S. savings bonds includes detailed information on how savings bonds work, Series EE savings bonds, Series I savings bonds, and other products issued by the U.S. Department of the Treasury. It will explain the tax benefits, where to buy the bonds, how to know the interest rate you are earning on your money, and much more.
History of U.S. Savings Bonds
Since their introduction, U.S. savings bonds have proven to be one of the most popular investments thanks to the government’s guarantee that you will never lose your money.
Should Savings Bonds Be Part of Your Portfolio?
You may have an image of savings bonds as nothing more than boring investments offered by older relatives during holiday gatherings and special occasions. Nothing could be further from the truth. In fact, over the past decade, savings bonds have outperformed stocks and real estate, thanks to the promise that you will never lose your money. In reality, savings bonds have outperformed stocks and real estate in terms of risk. It’s impressive.
Guide to Investing in Series I Savings Bonds
Series I savings bonds are great because they combine a guaranteed fixed rate of return with inflation adjustment so you won’t lose purchasing power if prices rise. Additionally, the U.S. government guarantees they will never lose value and does not charge you any fees when you place your order to purchase savings bonds!
Guide to Investing in Series EE Savings Bonds
Series EE savings bonds are probably the most familiar to you. In fact, they can be considered the modern take on savings bonds. They have some great features of Series I savings bonds but investing in them, including how to calculate their face value, is very different.
Series HH Savings Bonds
If you or a family member have been investing in savings bonds, you may still have Series HH savings bonds in your portfolio. Don’t cash them in just yet until you read this special offer! They are special because you can no longer obtain them, and they regularly generate cash income you can live on or use to pay your bills.
What Are the Tax Traps of Savings Bonds to Avoid?
How you fill out the paperwork the first time you invest in savings bonds can have significant tax implications for you and your family in the future. In fact, if you get it wrong, it could cost you tens of thousands of dollars in avoidable taxes.
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Sources:
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
TreasuryDirect. “Treasury Bills.”
TreasuryDirect. “Series I Savings Bonds FAQs.”
Source: https://www.thebalancemoney.com/invest-us-savings-bonds-358071
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