In the United States, this year, millions of individuals will seek out methods to begin saving money in hopes of purchasing a home, going to college and even retiring. As part of a financial portfolio, many Americans will consider the purchase of U.S. Savings Bonds. Of the savings bond types, the Series EE/E provides for a very low risk, 30 year investment option which is quite common among individuals who wish to diversify the financial portfolio using low risk savings options.
The Series EE/E savings bonds, as of April 30, 2005, provide for a fixed rate of return. While this rate of return varies, 3.6 percent as of the date of this writing, the true advantage to the savings bond lies in the financial guarantee of a gain rather than a financial loss. The savings bond will earn this percentage rate, calculated on a monthly basis, for up to 30 years.
For the investor seeking to diversify the financial portfolio, the Series EE/E savings bonds provide for investments ranging from $25.00 to $30,000.00 and can be purchased online. With ease of access, purchasing Series EE/E savings bonds provides for a great option to low risk investing for children or teenagers who are beginning to learn the concept of investing and saving money.
With the Series EE/E savings bonds as a low risk option, they are also extremely liquid. By that we mean the Series EE/E savings bond can be cashed in at any time provided 365 days have passed since the purchase. Beyond this 365 day waiting period, the Series EE/E savings bond can be cashed in, with interest paid, and without penalty. The only penalty, if applied, would involve a three month interest deduction penalty for Series EE/E savings bonds which are less than five years out from the purchase date.
In terms of retirement savings, the Series EE/E savings bond, as a low risk investment, if held for the full 30 years, will net a guaranteed return on the investment. While the interest accrued is taxable under federal IRS regulations, the odds are highly likely the tax applied in retirement will be significantly lower than that during early and mid adult life. For this reason, buying savings bonds and holding until maturity it highly advisable. However, keep in mind, the Series EE/E savings bond can be cashed in at any point between one and 30 years from the date of purchase.
As Christmas, birthday, Valentine’s Day, anniversary and wedding gifts, Series EE/E savings bonds offer anyone a unique opportunity to begin a financial portfolio with a guaranteed rate of return.
For more information regarding Series EE/E savings bonds, visit www.savingsbonds.gov