Homeland Security : US SAVINGS BONDS

Savings bonds differ from other government securities in that they cannot be used as collateral and are not negotiable. They are nonmarketable securities because they are nontransferable. They are not bought and sold on an exchange or over the counter; rather, they are purchased from the Treasury department either directly, or through various issuing agents.

Series EE/E bonds are a type of United States Savings Bond offered by the Department of the Treasury. The United States backs these bonds with its full faith and credit.

A bond earns interest through application of a market-based savings bond rate. The savings bond rate is a percentage of market yields on outstanding five-year marketable Treasury securities. The treasury announces this rate every six months. Interest accrues monthly and compounds semiannually.

A bond can earn interest for up to 30 years and interest earnings are payable upon redemption. Interest earnings on bonds are exempt from State and local income taxes, but bonds are subject to other State and local taxes as well as Federal taxes. Please see the Bureau of Public Debt website for a detailed explanation of Series EE/E bonds http://www.savingsbonds.gov/sav/savinvst.htm.

Series I bonds are a type of United States Savings Bond offered by the Department of the Treasury. The United States backs these bonds with its full faith and credit.

A bond earns interest through application of a composite rate. The composite rate consists of a fixed rate that remains the same for the life of the bond and an inflation rate that is subject to change twice a year. Interest accrues monthly and compounds semiannually.

A bond can earn interest for up to 30 years and interest earnings are payable upon redemption. Interest earnings on bonds are exempt from State and local income taxes, but bonds are subject to other State and local taxes as well as Federal taxes. Please see the Bureau of Public Debt website for a detailed explanation of Series I bonds:
http://www.savingsbonds.gov/sav/sbiinvst.htm

This guided tour will walk you through the main features of TreasuryDirect and give you a preview of the secure account that allows you to purchase EE and I Savings Bonds online.
http://www.treasurydirect.gov/

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