Government bonds offer investors a low-risk option for their portfolios. Bonds represent government borrowing from the public to fund many types of spending. Investors can buy bonds from banks for as little as $25 to several million dollars depending on the type of bond.
Series I and EE Bonds
As of 2010, the federal government offers Series EE and Series I bonds. Each bond has a different rate of return. Both can be purchased through banks. Treasury sells Series EE bonds for one-half of face value and Series I bonds at full face value. Series EE bonds are sold in specific denominations ranging from $50 to $10,000; Series I bonds are sold in denominations ranging from $50 to $5,000.
Bond transactions require the use of a Social Security number and an individual investor may only buy $5,000 worth of each type per calendar year, though bonds purchased as gifts do not count toward the limit. Treasury also directly sells bonds online, allowing investors to purchase an additional $5,000 of each type of bond.
Government bonds offer investors a low-risk option for their portfolios. Bonds represent government borrowing from the public to fund many types of spending. Investors can buy bonds from banks for as little as $25 to several million dollars depending on the type of bond.
Municipal Bonds
Municipal bonds raise revenue for state and local government borrowing. Some banks offer municipal bonds to investors. Banks and other financial institutions sell municipal bonds in denominations of $5,000 with no upper limit.
Government bonds offer investors a low-risk option for their portfolios. Bonds represent government borrowing from the public to fund many types of spending. Investors can buy bonds from banks for as little as $25 to several million dollars depending on the type of bond.
Transaction Fees
Inquire about bank transaction fees before purchasing bonds. Some banks and credit unions offer the service for free, others charge transaction fees for selling bonds.
References
- U.S. Treasury: I and EE Savings Bond Comparison
- The Investment FAQ: Bonds - U.S. Savings Bonds
- Bank of America: Tax Advantaged Investments
- American Eagle Federal Credit Union: Convenience Services
- Senator Chuck Grassley: Build America Bonds Program Keeps Getting Richer for Wall Street, Harder on Taxpayers
- TreasuryDirect. "Timeline of U.S. Savings Bonds." Accessed March 23, 2020.
- Department of the Treasury. "Introduction to Savings Bonds." Accessed March 23, 2020.
- New York State. "Certain Basics of Municipal Bonds." Accessed March 23, 2020.
- TreasuryDirect. "Series EE Savings Bonds." Accessed March 23, 2020.
- Federal Register. "United States Savings Bonds, Series EE, HH and I." Accessed March 23, 2020.
- TreasuryDirect. "Convert Your Paper Savings Bonds Using SmartExchange." Accessed March 23, 2020.
- Securities and Exchange Commission. "Zero Coupon Bonds." Accessed March 23, 2020.
- TreasuryDirect. "May 2005 and Later (EE Bond Rates and Terms)." Accessed March 23, 2020.
- TreasuryDirect. "Comparing Series EE and Series I Savings Bonds." Accessed March 23, 2020.
- Department of the Treasury. "Interest Accrual Dates for Series E, Series EE, and Series I United States Savings Bonds, and Savings Notes," Pages 1-2. Accessed March 23, 2020.
- TreasuryDirect. "Cashing (Redeeming) EE and E Savings Bonds." Accessed March 23, 2020.
- TreasuryDirect. "Buying Series EE Savings Bonds." Accessed March 23, 2020.
Writer Bio
Chris McGann began writing professionally in 1991. His work has appeared in the "Upper Dauphin Sentinel" and the "Wellsboro Gazette." He blogs on Daily Kos and Congress Matters, focusing on congressional procedure and elections. McGann holds a Master of Arts in applied politics from American University.