The first saving bond in US is EE Series. EE Series seems like zero coupon bond or accrual income. You cannot receive coupon periodically or semi annually. You must wait until this bond mature. Alternatively, you could sell the bond and get capital gain in the middle of maturity with condition the temporary price is high.
You can buy this bond a half of face value e.g., you just need 25 bucks to buy @ 50 bonds EE Series. You can buy saving bond at local bank near your home. Alternatively, you can buy saving bond through internets.
The EE Series has the maturity term ranging 8 to 17 years. In addition, the investor can further the term until 30 years. The EE series has strengthens that can reduce your tax.
We realize the EE series has weakness since it does not pay periodically. Therefore, we can find another alternative to raise your money. You can combine alternative EE series to your portfolio.
One of the EE alternatives is HH series. HH series give coupon rate to the holder so the holder could receive money every six months. HH series may be called as income bond. Unlike EE series, this bond is not cheap. You should provide money ranging $ 500 to $ 10,000. HH series determine interest rate base on first buying or fixed income. Since this investment fixed income, the value of bond does not change. Since Sub prime crisis happen, the government must pay more for the HH Series saving bond. On the other hand, the HH bondholder enjoys this situation.
Alternatively, you can buy I series. You can get tax-exempt both local and federal by investing it. I series is the newest saving bond series. It introduced in September 1998. I series mean to inflation so this bond is inflation bond. The bond is base on inflation index. This bond is quite cheap. You could purchase I bond ranging to $ 50 to $ 1,000. The government sells I bond base on face value. E.g., you must provide $ 100 for @ $100 I bond face value. You can contact bank or website who provides it.
I bond is same like the EE series. I bond does not promise to pay you periodically. It has maturity until 30 years. You could redeem I bond after six months like certified deposit. Since they linked to inflation rate, the interest rate I series will raise when the inflation rate raise and reversely
Filed under: bond | Tagged: bond, saving bond
