Savings bond how does it work




















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Treasury and backed by the federal government. When you buy a U. The U. Treasury issues bonds, while the federal government guarantees them to ensure you get that money back. The federal government currently issues two types of savings bonds, while local governments offer their own type. Introduced in , I bonds come with a combined fixed and inflation-adjusted interest rate, which accrues for up to 30 years. They offer a way to save for future expenditures, as they cannot be cashed until at least 12 months after purchase, and the longer you wait to cash the bond, the more interest it accrues.

Fixed Income Essentials. Treasury Bonds. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. These choices will be signaled globally to our partners and will not affect browsing data. We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Personal Finance.

Your Practice. Popular Courses. Bonds Fixed Income Essentials. What Are U. Savings Bonds? Key Takeaways U. Savings bonds are sold at a discount and mature to their full face value, and do not pay regular coupon interest. Series EE bonds are sold at half of face value and mature in 20 years. Series I bonds are adjusted for inflation. Compare Accounts. Although your browser settings don't allow you to view the website survey we're conducting, please e-mail your comments.

As of , U. Savings Bonds go digital. Explore our interactive timeline to learn about their rich history. Department of the Treasury, Bureau of the Fiscal Service. Other Treasury Securities. Replace or Reissue. Tax Consider- ations. Death of a Savings Bond Owner.

Patriot Savings Bond. EE bonds issued from May on EE bonds we sell today earn the same rate of interest a fixed rate for up to 30 years. When you buy the bond, you know what rate it will earn for at least the first 20 years.



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