Investing in a savings bond is a low-risk investment you can make as it is an investment made directly with the government. Before treating the topic it is important to know what a savings bond is all about and this article covers it all.
What is a savings bond?
A savings bond is a system of citizens lending money to the government of a country that is in debt and in return gets back the principal and interest from the government.
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Where is a savings bonds serial number?
The serial number of a savings bond could be found in the paper of your investment fund security in the lower right corner. You must keep the serial number of your savings bond as cases like losing it may occur. For easy assess to your savings bond, you must add the serial number with the TreasuryDirect online calculator for the latest estimate of the bond.
How to calculate a savings bond
The longer you hold a savings bond the larger the interest. As the value rises over the years you may no longer know the worth of the saving bond you have. In this case, it is necessary to use the TreasuryDirect online calculator to know the worth of the savings bond you purchased.
The bond serial number, issue date, face value, and bond series are used to calculate the value of the savings bond. For instance, you purchase a saving bond worth $25 in the year 2000 the face value for it in 2020 would be $50. Its interest rate isn’t very high but it is a safe and secure way to invest.
Can you give it as a gift?
Yes, it is possible to gift a saving bond. You can do that by purchasing an electronic savings bond in the gift box in your TreasuryDirect account until you are ready to send it to the person you intend to gift. The steps are as follows
- Visit www.treasurydirect.gov to login into your treasury account or create an account for yourself
- Purchase the type of saving bond you intend to buy in the denomination of ($25 to $10,000)
- Your savings bonds will undergo a compulsory five-business-day holding period before sending to the person you intend to gift TreasuryDirect account.
- The account number of the recipient, legal name, and social security number must be used for gifting a saving bond.
- A gift certificate would be printed for the recipient.
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What is the series EE savings bond?
It is a bond that is low risked and pays back an interest that is expected to double in 20 years. It is valid until a period of 30 years, or you can decide to cash it out before the validity date. To purchase it you need to visit TreasuryDirect online as the paper form is no more available.
The interest is paid on a monthly basis which is compounded two times on a yearly basis. Your EE bonds cannot be withdrawn until a five-year period which is why it is an investment system designed for those who desire to invest in a long-term investment deal.
What is the series I savings bond?
It is a nonmarketable savings bond of the US government. It is designed to maintain the value of your cash from inflating. They follow up issues with rising prices that may cause inflation. It is not part of state and local income taxes making it easier for people who live in high-taxed states and cities.
I bonds earn interest monthly just like EE bonds and compounded semi-annually in a period of 30 years. You can equally cash out after a year. The lowest you can purchase an I bond is $25.
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Conclusion
It is designed to profit both the government and the citizens. It helps generate income for the government through the citizen’s investment in the bonds in return rewards with an interest. It is advisable to invest in it as it is the number one low-risk investment to invest your money in.
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