Investing in Bonds: I Savings Bonds Info

This is where this website starts to get very interesting because our goal is to be financially safe, and we are not going to achieve that only by saving money, we can use the money we save to make small secure investments that will help us do things such as consolidating debt and paying for our bills. A good financial plan is a plan that helps you achieve the financial goals that you want, so that you can live the life that you want, without being stressed because you owe money or because you don’t know how are you going to buy the things that you need. So, today we start talking about making money through secure investing.

I Savings Bonds

I mentioned that we want to make small investments that are secure. Because we don’t want to make big mistakes that will cost us greatly, we want to make a small Return on the Investment (ROI) even if its low. I Bonds are low risk and if you buy them you will earn interest while you own them, they will also protect you from inflation. For example people who have purchased Series I Savings Bonds in November will make a 3.36% by April 30th.

Ever since the I savings bonds program was launched back in September 1st, 1998, people owning them have been protected from inflation. You can learn what is going to be the I Savings Bonds rate every November 1st and May 1st. These bonds have a final maturity, meaning that they stop earning interest 30 years after the bond has been issued. The final interest rate is issued on the first day of the final maturity month.

You must own  a Series I Savings Bond for at least a year before cashing in. You will be penalized if you redeem your bonds within the first five years, so you will lose the last 3 months of interest as a penalty. If you redeem a 36 month old bond you will receive your investment and 33 months worth of interest. After 5 years you won’t be penalized and you will cash in all of your money.

You can also buy Paper I Bonds, they can  be acquired online, you have to open an internet processing account with the U.S treasury department at treasurydirect.gov, if you do that then you can even buy EE savings bonds online, and you can even set up automatic purchases for as little as $25 dollars. If you don’t you simply have to go to a local bank to buy them, but you have to check if your bank does have them, because some don’t.

You can open an account at http://www.treasurydirect.gov/indiv/myaccount/myaccount_treasurydirect.htm

This information you can find it more Complete on the Treasury Direct Website found at:

www.treasurydirect.gov

You can buy I Bonds through Treasurydirect.gov in the following ways:

- At face value, you pay $50 for a $50 dollar bond.

- They can be purchased in amounts of $25 dollars or more, to the penny.

- You can buy at most $5000 dollars worth of bonds in one year.

- They are issued electronically to your designated account.

How to Buy Paper I Bonds

- They are also sold at face value, you pay $100 for a $100 dollar bond.

- They can be purchased at demonitations of $50, $75, $100, $200, $500, $1000, and $5000 dollars.

- $5000 is the maximum amount you can purchase in one calendar year as well.

- They are issued as paper bond certificates.

I Bonds can be used for many things like financing education, as a supplement retirement income, or for making more investments after you receive your interests worth.

So, a quick Recap:

Current Rate 3.36% through april 30,2010
Face Value, $50 for a $50 dollar bond when purchasing bond certificates.
$25 for a $25 dollar bond when purchasing through treasurydirect.gov.
Maximum purchase in one year $5000 in treasurydirect.gov and $5000 in paper bonds.
Denominations For Paper Bonds $50, $75, $100, $200, $500, $1,000, and $5,000. Electronic bonds through treasurydirect can be purchased to the penny for $25 or more.
They are issued in Paper Bond Certificates or electronic issue in treasurydirect.gov accounts.

Just wanted to make things clear, so you don’t get confused about what you can or can’t do. If you want more information on things like taxes, rates, terms, redemption information and stuff like that, visit the following web page at treasurydirect, just copy and paste it in your browser, http://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm.

Before you leave.

Where to Buy Bonds?

Treasury Direct.

Banks and other financial institutions.

Internet Banking Systems.