BONDS » Current Rates, News & Information

Did you ever of wonder how fixed rates and inflation rates affect your bond’s interest rate? Look no further for the answer. Currently there are two US savings bond options available for purchase. Investors can choose from either the current EE Series bond and the I Series Bond. It is certain that both the fixed rates and inflation rates affect your bond’s interest rate.

If you are in possession of an I Series Savings Bond, its interest rate is derived from a combination of a fixed rate and a semiannual inflation rate. There will be a small fixed rate of return that remains constant throughout the entire life of the loan. Additionally there is a variable rate that works in direct correlation with the Consumer Price Index for all Urban Consumers (CPI-U).

US Savings Bonds are a simple way to invest and make your money grow over time.Bonds left to grow till full maturity earn a compound interest rate. Meaning capital earned on interest becomes compounded every time. So if you have little money to invest you cannot expect to get a significant rate of return on your bonds. If at all possible, you should try to avoid redeeming Bonds too early because of interest penalties and the loss of future earnings.

However, if you are in a financial rut, there are some terms for the early redemption process of US Savings Bonds.Once invested, the Bonds cannot be touched for a full year. After that year, they can be accessed but if the money is withdrawn, the three months prior interest is forfeited as a penalty. If they are withdrawn after five years of holding, there are no penalties accrued.

US Savings Bonds are considered to be one of the safest investments an individual can make to diversify their portfolio. Since there is the muscle of the Federal government behind them, the principal is not at risk. The current bond series are Federal issued properties, there is no state or local taxes accrued. Finally there is a guaranteed rate of return and yield on investment. Investment in Bonds are considered long term strategy, and there are penalties for Bonds to be redeemed too early.

Despite US Bonds sounding perfect there are penalties for early withdrawal of US Savings Bonds. Both the EE Series and I Series bonds are current investment opportunities that mature over a thirty-year period. Once invested the Bonds cannot be touched for a full year. After that year, they can be accessed but if the money is withdrawn, the three months prior interest is forfeited as a penalty. If they are withdrawn after five years of holding, there are no penalties.

US Treasury savings bonds are a smart way to diversify a portfolio. They are Federally issued and backed, have no state or local taxes, the capital is always returned, and they offer a consistent rate of return. This rate of return differs based on when the bond was issued and what series it is from. Bond Rates are released semiannually.

The Bond Rates that are released are based on the Consumer Pricing Index and the treasury releases that current rate information twice a year. The dates have historically been on May 1 and November 1. The most current Bond Rate Information was released November 1, 2008.

For decades Savings Bonds have been a secure, safe, and reliable way for individuals to diversify their investment portfolios. There are tax benefits to investing in Savings Bonds, as well as getting back your principal and a guarantee return on an investment. However, Savings Bonds may not be an appropriate investment choice for you if you are looking to make money fast.

Savings Bonds are investments best used for long-term strategies because of how they pay the return on investments. US Savings Bonds were created by the Federal Government as a way for them to borrow money from US citizens when they were short on cash. Investors buy the bonds and hold onto them until they reach full maturity. Maturity is the term used when bonds have earned all the interest they can; this period can last up to thirty years. If you have decades to get a return on your initial investment then Savings Bonds are an appropriate investment choice.

Since 1917 the US Treasury sold Bonds as a way to generate a cash flow to help fund the expenses that the government was accruing. At this point the US Treasury has issued savings bonds series starting with the letter A and they currently have the I Bond Series available for sale.

With each new bond series comes a change of the Treasury Rules on the bonds. Each bond is developed for a different time and reason so no two are exactly alike. Then sometimes during the lifetime of a bond the government may issue additional revision. There is no set schedule for when the Treasury changes the rules on bonds.

One of the most recent changes the Treasury issued was on the Series EE Savings Bond. Since their original introduction in 1982 the Series EE Savings Bonds had been earning an interest rate that was adjusted every six months and was pegged to 90% of the average 5-year Treasury note yield in the prior 6 months. However, the last Treasury Bill Change revised the yield for bonds issued after May 1, 2005 to provide a fixed rate for the lifetime of the Bonds up to 30 years.

US Savings Bonds issued by the Treasury are a debt security issued by our government as a way to borrow money from their citizens.  Since the mid-1930’s bonds have been issued by our government in alphabetical order. Each Bond Series that has come out has been slightly different then the last for a variety of reasons and the all have different rules from the treasury. Each bond since the A series has had a different interest rate and length of maturity. Some are sold at face value, some double in their value as per the terms of their full maturity.

The bond rules have been altered because of trial on error, the state of the current economy and even how the proceeds of the debt security are going to be used.

For years financial brokers have joked with their clients if they weren’t risk takers and wanted to invest like “old ladies or orphans.” That often stirred up the conversation of which are the Safest Bonds to Purchase and the answer to that is quite easy.

For decades the US government have been borrowing money from their citizens in the guise of US Savings Bonds. Investors purchase bonds, the government guarantees a return for the investment and uses the money they borrowed to finance and pay for their needs. A US Savings Bond is like an “IOU” from Uncle Sam and there is no safer family member to trust making it an extremely Safe Bond to Purchase.

When investing ones hard earned cash into savings bonds, consumers are guaranteed not only the return on their principal but also an additional yield rate for the money they loaned. The maturity of the bonds are usually long term, stretching toward 30 year investments. So even if the money was loaned during financial crisis for the US, in thirty years the economy will certainly shift and the government will make good on their loans making US Savings Bonds the safest investment one can make.

Bonds are a type of debt security where the US government and their local branches can borrow money from their citizens. In return investors who purchase bonds usually earn a rate of return from the entity that issued them.

Although bonds can legally be issued through a number of places, not all bonds are created equal. The most safe and secure bonds are US Savings Bonds. They are legally issued from the US Treasury and have been an easy method of investment for decades. They have the muscle of the US Treasury behind them, are a low principal risk investment, and have a guaranteed rate of return.

However, there are other government entities that can legally issue bonds. In general, cities, counties, school districts, municipal utility districts, hospital districts, institutions of higher education, certain state agencies, and nonprofit organizations created to act on behalf of a governmental entity can issue bonds. Each bond is unique, and if a bond is not issued from the US Treasury then it is not a US Savings Bond.

US Savings Bonds have a long history of being a secure, safe, and easy way for investing money for long-term growth. The system was originally developed as a way for the cash strapped US government to borrow money from their citizens to help fund wars. Because it is a loan to the Federal Government, investors will get their money back, plus interest and additional Tax Benefits exclusive of Savings Bonds.

There are a multitude of Tax Benefits for Savings Bonds. These bonds are federally issued, thus making them tax exempt from local and state taxes. When cashing out a savings bond, there will be no taxes paid to your city or state for the profit generated from these investments. Federal taxes still apply and must be paid the year the bond is cashed out.