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Here’s what you need to know about savings bonds

Saving & Investing
Here’s what you need to know about savings bonds

Not many people talk about savings bonds anymore, but they’re still a convenient, affordable and safe way to invest your money.

What is a savings bond?

Savings bonds are a low-risk investment you can purchase from the U.S. Treasury at face value for yourself or as a gift for a loved one. Two series are offered: EE and I. You can learn more about the differences between these two types of savings bonds on Investopedia.

How do savings bonds earn money?

Interest accrues monthly and compounds semiannually on savings bonds and is taxable at the federal level when the bonds mature or you redeem them.

How do I buy and redeem savings bonds?

Buy and redeem savings bonds in paperless electronic form  directly from the U.S. Treasury at SavingsBonds.gov. You can follow this guided tour for assistance.

How do I find out how much my savings bonds are worth?

If you have paper savings bonds, you can use this calculator to find out how much they are worth.

Can I redeem savings bonds at Arsenal Credit Union?

Yes. You can redeem Series EE and Series I paper bonds at Arsenal Credit Union. Click here for more information.

Why invest in savings bonds?

U.S. TreasuryDirect lists six reasons why you should invest in savings bonds.

  • Competitive: U.S. Savings Bonds offer competitive rates that compare favorably with other forms of saving. Interest accrues monthly and compounds semiannually.
  • Convenient: You can buy them online through TreasuryDirect.
  • Safe: The United States backs savings bonds with its full faith and credit. Your paper bonds are registered, so if they’re lost, mutilated, or stolen, Treasury can replace them in electronic form within your TreasuryDirect account. Bonds in TreasuryDirect are safely maintained in your account with the U.S. Treasury.
  • Accessible: Need your money quickly? It’s right there for you, although the longer you let your bonds grow, the more you benefit. Still, you can redeem them anytime after 12 months.
  • Tax Benefits: Interest is exempt from state and local income taxes. Federal income tax is deferred until your bonds mature or you redeem them, whichever is first. Also, if all conditions are met, using savings bonds to pay for some education expenses offers additional federal tax benefits.
  • Affordable: Save with as little as $25.00