Family Budget Worksheet

Understanding Savings Bonds

If you are looking to save or invest your money you have probably come across savings bonds which has left you with a few unanswered questions. There is so much to learn and know about them. Why are they a good investment, how do I know that my money is safe? Furthermore, can I keep track on the growth of my bond and how do I purchase one?

To understand savings bonds you must first know what they are. Savings bonds are a common way to invest money. They are a type of bond that is backed by the U.S. government. Because of this they offer investors that extra reassurance that their money is safe and protected

There are two different types of savings bonds. The most common is the EE savings bonds. They are bought for half the value of the final maturity redemption rate up to $10,000. Series I bonds hold a fixed rate of return plus an inflation rate and can not be purchased for more than $5,000. It is also important to note that both bonds hold a penalty if they are sold within five years.

Either bond can easily be purchased. You can buy them through your local bank or credit union. You can also buy them from the online government treasury website at www.treasurydirect.gov. They are easy to purchase and many people use them as gifts as well as a way to save for their retirement.

After you buy a savings bond or if you already have one you can find savings bond calculators online, like the one at www.treasurydirect.gov/indiv/tools/tools_savingsbondcalc.htm to check the current value of the bond. You will need to have a few pieces of information to enter. The savings bond calculator will need to know the type of bond you are checking, the value it was bought at, and the year. That is it. You can easily check the value of your bond anytime and at no cost.

It is easy to see why people like savings bonds so much. They are easy to purchase and offer a guaranteed return. They are backed by the U.S. government which makes them a very safe investment.