A Savings Bond is a bond issued by the government which can be purchased by individuals. Savings Bonds are a safe investment with no risk of loss, but earn interest rates which are generally lower than available through other investments.

Savings Bonds have been a popular gift and investment for many years.

Their characteristics have changed over the years. In 2020 there are two types of Savings Bonds available:

The first type is the Series EE savings bond which is held in an account at the Treasury Department. Series EE savings bonds earn a fixed rate of interest based on purchase date. However, the value of the bond will double in 20 years, even if the interest rate is low. This means that If you hold the savings bond for exactly 20 years, your effective interest rate is approximately 3.5%.

The second type is the Series I savings bond, which can either be held in an account at the Treasury Department or issued as a paper bond. Series I savings bonds earn a fixed rate of interest based on purchase date and an amount tied to inflation which changes twice a year.

More information on these savings bonds can be found at: www.savingsbonds.gov