U.S. Savings Bond
http://www.ussavingsbonds.gov
Savings bonds are issued by the U.S. government and sold by banks in denominations from $50 to $1,000. The purchase price is 1/2 of the face value (i.e., $50 bonds sell for $25) and bonds are worth face value when they mature (6 to 12 years). Interest rates are adjusted semi-annually. Higher denominations can be ordered.
Features include:
- Safe investment with market based rates
- Easy to purchase and easy to redeem
- Since interest accumulates, no federal income tax is paid until the bond is cashed
- No state income tax is charged on the interest
- It is possible to defer paying federal income taxes by exchanging matured Series EE Bonds for Series HH Bonds (HH Bonds are no longer sold and can only be obtained by exchanging EE Bonds)
I Bonds
The new I Bond and its unique benefits make it an ideal way to build up savings you simply don't want to risk.
- I Bonds are sold at face value and grow with inflation-protected earnings for up to 30 years.
- I Bonds are affordable. You can invest as little as $50 or as much as $30,000 per year.
- I Bonds are safe. They are U.S. Treasury securities backed by the full faith and credit of the United State Government.
- I Bonds are tax advantaged. You can defer Federal taxes on earnings for up to 30 years and they're exempt from state and local income taxes. The best part is, you don't need to do anything to get these benefits.
- They're built right into I Bonds.
- I Bonds will usually increase in value every month and interest in compounded semi-annually.
- I Bonds are liquid and can be turned into cash anytime after six months.
