• U.S. Government bond issued in Face Value denominations ranging from $50 to $10,000. From 1941 to 1979, the government issued Series E Bonds. Starting in 1980, Series EE and HH bonds were issued. Series EE bonds, issued at a discount of half their face value, range from $50 to $10,000; interest bearing Series HH bonds range from $500 to $10,000. Series EE bonds earn interest for 30 years; Series HH bonds earn interest for 20 years. Series EE bonds, if held for five years, pay 90% of the average yield on 5-year Treasury securities based on the previous six months. Series HH bonds are no longer issued. For many years, the government guaranteed a minimum yield on savings bonds. This yield decreased from 7.5% to 6% and then to 4%. The guaranteed minimum feature was dropped in May 1995, and bonds issued on May 1, 1997 or later and held for less than five years are now subject to a 3-month interest penalty. For example, a bond cashed in after 18 months would receive 15 months' worth of interest. Savings bond yields are readjusted every six months, on May 1 and November 1. Series I bonds provide a return that rises and falls with inflation. I bonds are issued in face amounts from $50 to $10,000. The interest on an I bond is determined by two rates. One, set by the Treasury Department, remains constant for the life of the bond. The second is a variable inflation rate announced each May and November by the Treasury Department to reflect changes in the Consumer Price Index reported by the Department of Labor. I bonds earn interest for 30 years and interest is added monthly and paid when the bond is redeemed. The interest from savings bonds is exempt from state and local taxes, and no federal tax on EE bonds is due until redemption. Taxpayers meeting income qualifications can buy EE bonds to save for higher education expenses and enjoy total or partial federal tax exemption. This applies to individuals with modified Adjusted Gross Incomes between $61,200 and $76,200 and married couples filing jointly with incomes between $91,850 and $121,850. Income levels are adjusted for inflation annually. EDIT============================ I-Bonds Inflation-indexed Savings Bonds issued by the United States Treasury in eight denominations ranging from $50 to $10,000 with a 30-year maturity. Unlike other inflation-adjusted bonds, but like other savings bonds, the securities, which were introduced in 1998, offer special tax benefits. As long as investors hold their bonds, they may defer paying taxes on their earnings, which are automatically reinvested and added to the principal. Like other Treasury bonds, I-Bonds are exempt from state and local income taxes. If the bond is redeemed to pay for college tuition or other college fees, investors may exclude part or all of the income in calculating their taxes. The payout on the bonds is determined by two rates. A fixed rate, ranging from 3% to 3.5% when the bonds were first introduced, is set by the Treasury Department. The second rate, a rate of inflation, is determined every six months by the Bureau of Labor Statistics to reflect changes in a version of the Consumer Price Index. Some protection against deflation exists in that any decline in the Consumer Price Index (CPI) could eat into the fixed rate, but not affect the underlying principal.
  • In the past 10 years, especially currently, the interest on I bonds has been better than EE bonds. EE bonds are issued at half the "maturity" value (i.e. you pay $25 for a $50 bond maturing in 30 years) and I bonds are issued at face value. Savings bonds are no longer issued on paper, only electronic on
  • Most people don't realize this but buying any king of US bond adds to the national debt. Maybe not much for an individual bond of $10,000 or less but on large bonds and many of them the Treasury Dept must go to the Federal Reserve Corporation to borrow the money to pay off the bonds. This adds to the national debt. Every dollar you have and every one I have is borrowed from the Federal Reserve Corp and we are paying interest on those dollars. The Federal Reserve is a private corporation not part of the USA but is owned mainly by the Rothschilds if England.
    • mushroom
      True, but the Fed also gives back about 2/3 of the interest it made from bonds to the Treasury. The Fed is more about greasing the wheels, to make sure its member banks don't run out of cash, leading to a bank panic.

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