Savings Bonds

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US Savings Bond

A US savings bond is a security issued by the US treasury and began being issued during president Roosevelt's presidency in 1935. A month after the president sign the legislation, the first savings bond was issued with a purchase price of 18.75, but a face value of $25. These first bonds were eventually nicknamed “the baby bonds”. When bonds first became big was during the US’s involvement with WWII in 1941. These bond were called the Series E Defense bonds and they went towards the countries war effort. When one purchases a savings bond, the amount of money you purchase it for is loaned to the government for funding. Then at its maturity, the loan has collected interest for allowing the government to use your money. These bonds used to be able to be purchased at a bank, but it is now only possible to buy bonds online or with a tax refund and the are guaranteed by the federal government. The smallest bond available is $25, but the amount your bond is worth is determined not only by the amount but the interest rate, the economics conditions, and the time it is kept untouched. The interest rates for new bonds are 1.76% for series I and . 20% for series EE.

In Order to redeem a bond, most banks or similar institution will redeem a bond. The process is very similar to to cashing a check however some banks will no longer cash bonds. In order to redeem a bond you must have identification to prove you are the owner of the savings bond and will need to sign the backs of each bond to have your signature verified. However if you redeem a bond before it has matured (generally by its fifth anniversary) you will need to pay a penalty often equal to the last three months of your interest.
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