Series EE Savings Bonds

Series EE Savings Bonds

Series EE Savings bonds is a special category of tax free bonds issued by the US government. These bonds have lighter terms than the ordinary bonds as they are available in smaller denominations and maturity period is not fixed. They can be redeemed anytime after they have lived for six months. Like any other government bond, these bonds are issued to help the government raise money to fund major projects that require plenty of money to carry out. EE Savings Bonds can be categorized into two major classes. You may have electronic or paper savings bonds. Electronic With Electronic EE Savings Bonds you do not receive tangible paper bonds. Instead they are issued to an appointed account which is determined by the buyer. There is a limit to the number of electronic EE Savings bonds you can buy in a year. In the US, the lawful limit is $ 25,000 worth of bonds. Another feature of these bonds is that they are issued at their true per value rate. For instance, if you buy $2000 worth of bonds, your designated account is credited with bonds value of $2,000 which is also the amount that you are entitled at the bond maturity. Paper Paper EE Savings Bonds are different from the electronic type in that you will be issued with a physical bond certificate upon purchase. The maximum paper EE Savings bonds that you are allowed to purchase in the US in one year is $5,000. An interesting feature about this type is that they are issued at half the nominal or face value. For instance if I want to purchase $10,000 worth of paper EE Savings Bonds, I will be expected to pay $5,000 at the point of purchase. Since the bonds have no strict redemption time, you are allowed to redeem them any time after six months. The US government policy is that if you redeem the bonds in 5 years of investment, then you forfeit 3 months worth of interest that could have accrued. However if you cash after 6 years, you will receive the full amount that the bonds are worth. This is the factor that differentiates EE Savings Bonds from the 30 year government bonds which cannot be redeemed before their maturity. The question on who is allowed to own the EE Savings Bonds has been a discussion topic but recently the government cleared the air by allowing every one to purchase them. Individuals, businesses, companies and even institutions can buy these bonds.

Get Schooled on Cookware