As an alternative to investing in high interest rate savings account, US treasury savings bonds can be a good, safe place to invest money. However, you need to understand the fundamentals of United States savings bonds before you buy us savings bonds.

U.S. savings bonds come in two main options: series I savings bonds and EE savings bonds. Let’s start by understanding I series savings bonds. The I in savings bonds series I stands for inflation indexed bonds. These I series bonds allow people to invest in a bond that is guaranteed to have a rate of return at or above the inflation rate.

You can buy US I series bonds in amounts of $50, $75, $100, $200, $500, $1,000, $5,000 and $10,000. These bonds can earn interest up to 30 years. These Series I Savings Bonds have interest semiannually and the earnings are add monthly.
The I-Series Savings Bonds are also tax efficient investment vehicles. With respect to Federal taxes, the federal income tax on the earnings from these I-Series bonds can be deferred until you cash them in or if not cashed in then at the 30 year mark. They are exempt from state and local taxes. I want to warn you though that if you are cashing in savings bonds (I Series savings bonds) before holding them for 5 years, you will have a 3-month earnings penalty.

The second common US Treasury savings bonds are the EE savings bonds. The Series E savings bonds pay interest at a rate of 9% of the average 5-year Treasury securities yeild for the past 6 months. This means that the rate of interest on these US savings bonds series EE is variable and fluctuates based upon the Federal government bond trading market.

U.S savings bonds can be very good places to put your savings into. They are very popular as gifts for children. These U. S. Savings Bonds can grow in value as your children or the children of a loved one grow up. By the time they are ready to go to college, the EE savings bonds value an the US savings bonds redemption values of the I-Series bonds can help pay for tuition or living expenses.

Where to purchase savings bonds? US savings bonds ee series can be purchased through many financial institutions, including your bank. One nice option for investing in US Treasury Savings Bonds is to purchase them via payroll deductions straight from your paycheck. You need to check with your employer as to whether they offer this option. Please feel free to ask any questions you have about US Treasury savings bonds in the comments below.