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Investing

Savings bonds explained

The difference between Series I and Series EE bonds.

One of the most commonly purchased types of bonds are the government-issued savings bonds. These saving bonds come from the U.S. Treasury if you are purchasing them from within the United States, and therefore the yields are generally fixed. Additionally, since you are borrowing the money from the federal government, savings bonds are an extremely low-risk way to invest your money for the long term. Savings bonds have differing maturity dates, so if you should be able to easily find a savings bond that is right for you. You should keep in mind, however, that these bonds are generally intended for long-term investments.

Savings bonds are different from many of the other bonds and notes that are on the market because in most cases you are not allowed to sell them before the maturity date. For this reason, you should only put money into savings bonds if you are ready to wait until the maturity date in order to get your investment money back.

If you’re looking to purchase savings bonds, then you should probably look into buying either series I or series EE bonds. There are several differences between the two bonds, though the most notable difference is that the I bond was not introduced until 1998. This bond is indexed so that it will react to inflation. This means that you will not have to worry about inflation too much, as your bond yield will change to reflect these changes in the economy.

When you purchase an I Bond, you will be buying it at face value. You will earn interest on the bond every month. In most cases, you can wait to get your interest payments until after you decide to cash in the bond after it reaches maturity. These bonds are also even more difficult to transfer than the EE series bonds.

EE bonds differ from the I bonds in that they are purchased at half of the face value. Since these bonds will earn interest that varies based on the current economy, you will never know when the bond reaches its face value. This means that your bond could be worth more than face value when it reaches its final maturity date. Ideally, you should cash your Series EE bonds after they reach face value, but before the final maturity date when they stop earning interest.