DEFINITION of 'Savings Bond Plan'

A program that allows employees to purchase U.S. savings bonds, such as the Series EE and Series I bonds, through payroll deductions. Money is set aside from each paycheck, and when enough money has accumulated, the company purchases a savings bond on the employee's behalf. Paper bonds are mailed directly to employees from the government, or are mailed to the employee's company for distribution. The plan may only be available to certain employees, such as those who work for the company full time.

BREAKING DOWN 'Savings Bond Plan'

Series EE paper bonds can be purchased in denominations of $50, $75, $100, $200, $500, $1,000, $5,000 or $10,000 and can be purchased for half of their face value (i.e. a $10,000 EE bond costs $5,000). Series I bonds can be purchased in denominations of $50, $75, $100, $200, $500, $1,000 or $5,000 with a purchase price equal to the denomination. Bonds may be registered to a single owner, co-owners or a single owner with a single beneficiary who will receive the bond upon the bondholder's death.



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RELATED FAQS
  1. What is the difference between EE and I Bonds?

    Read about the similarities and differences between the EE and I savings bond programs created by the U.S. Department of ... Read Answer >>
  2. How long will it take for a bond to reach its face value?

    Learn when different savings bonds reach face value, and determine the best time to cash them in to get the highest return ... Read Answer >>
  3. How long will it take for a savings bond to reach its face value?

    Learn essential information about U.S. savings bonds along with an explanation of the unique characteristics of this popular ... Read Answer >>
  4. How are savings bonds taxed?

    Learn who is responsible for reporting U.S. EE savings bond interest for taxation and when the interest can be reported for ... Read Answer >>
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