US savings bonds are popular options for retirement savings, buy-and-hold investment strategies, as well as gifts for children and young adults. While these bonds have been stable and fashionable investment vehicles for years, you may be curious as to how much does it cost to buy US saving bonds?
The cost of the bond will vary depending on what type of bond you are purchasing. A US savings bond can be purchased at various fractions of the face value of the bond, and can range from pennies to as high as $10,000. You also have the option of purchasing bonds electronically as well as physically, and the cost of these bonds will also vary.
When you break it down, how much it costs to purchase US savings bonds is easier than it seems. It is important to understand what these investment instruments are, how much they cost, and why you would purchase them.
US Savings Bonds: An Overview
It is important to understand what a savings bond is before you can answer the question of how much does it cost to buy a US savings bond? Sold by the United States government, a US savings bond is an interest-bearing bond backed by the full faith and credit of the US. Savings bonds are one of the safest investments you can make.
These bonds are often purchased for less than their face value, usually 50% less. This means that the true dollar value of the bond is twice the actual amount that is paid. The full value of the savings bond can’t be realized until the maturity date.
US savings bonds are one of the most secure investments in the world, and can provide an excellent safety net in an overall investment strategy or fantastic gifts for loved ones.
Your individual circumstances will dictate how much of your portfolio should be held in bonds. Online brokerages such as ETrade, offer calculators and investment tools to help you find the right mix of investments for your portfolio.
How Much Does It Cost To Buy Us Savings Bonds?
It is fairly straightforward to determine how much does it cost to buy US Savings Bonds, with the two classes of bonds issued today being the Series EE and Series I. The Series EE are savings bonds usually given as gifts, and the Series I used primarily for savings.
Series E and Series EE are normally given to children to assist with future expenses such as school, or to help with building a nest egg. A Series EE bond is worth twice what is paid for it, meaning you can buy a $100 US savings bond for $50.
A Series EE bond can be redeemed for face value after 17 years, and can continue to accrue interest for an additional 13 years after the maturity date. In denominations as low as pennies you can buy electronic bonds at face value.
A Series I bond is also bought at face value, and Series E bonds – sold prior to 1980 – cost 75% of their face value. For savings bond that were issued after 2003 you must wait one year before you can cash them in, and you must wait six months before cashing in bonds issued prior to 2003.
US savings bonds are easy, safe investments that can assist you in achieving your investment goals. Carefully consider your unique investment objectives before committing any capital.