U.S. Savings Bonds


DEFINITION of 'U.S. Savings Bonds'

A U.S. government savings bond that offers a fixed rate of interest over a fixed period of time. Many people find these bonds attractive because they are not subject to state or local income taxes. These bonds cannot be easily transferred and are non-negotiable.

BREAKING DOWN 'U.S. Savings Bonds'

U.S. savings bonds are one of the safest types of investments because they are endorsed by the federal government and, therefore, are virtually risk free. Although these bonds do not earn much interest compared to the stock market, they do offer a less volatile source of income.

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  1. How is it possible for a rate to be entirely risk-free?

    It is not possible for a rate to be entirely risk-free. The risk-free rate of return is a theoretical construct that underlies ... Read Full Answer >>
  2. How long will it take for a savings bond to reach its face value?

    As government-issued investment instruments, U.S. savings bonds are one of the most risk-free investments available anywhere. ... Read Full Answer >>
  3. What assets are most risky and what assets are safest?

    The major investment asset classes include, savings accounts, savings bonds, equities, debt, derivatives, real estate and ... Read Full Answer >>
  4. What is the Education Savings Bond Program?

    An education savings bond program allows qualified taxpayers to exempt all or a portion of interest earned upon redemption ... Read Full Answer >>
  5. How are savings bonds taxed?

    According to Treasury Direct, interest from EE U.S. savings bonds is taxed at the federal level but not the state or local ... Read Full Answer >>
  6. What's the difference between bills, notes and bonds?

    Treasury bills (T-Bills), notes and bonds are marketable securities the U.S. government sells in order to pay off maturing ... Read Full Answer >>
  7. Why do low interest rates cause investors to shy away from the bond market?

    The lower rates that are found on bonds, especially government-backed bonds, are often not seen as enough by investors. This ... Read Full Answer >>
  8. Are long-term U.S. government bonds risk-free?

    For any debt obligation to be considered completely risk-free, investors must have full faith that the principal and interest ... Read Full Answer >>
  9. How does an investor make money on bonds?

    Bonds are part of the family of investments known as fixed-income securities. These securities are debt obligations, meaning ... Read Full Answer >>

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