How to Buy US Savings Bonds
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There are advantages to US Savings bonds:
1) Buying a US savings bonds is one of the highest forms of patriotism. At present, the U.S government is in a recession, the purchase of US savings bonds can increase investor confidence thus helping out the country.
2) US savings bonds are safe and secure because it is the US government that guarantees the investment made.
3) The interest rates are competitive and enjoy preferential tax treatments such as no state or local income tax for earned interests on the bonds and deferred tax until the bonds are redeemed.
Step 1
Where to buy US savings bonds? - US savings bonds are conveniently offered by employers in plans for payroll savings. There are also a number of banks and credit unions that offer you the ability to purchase the bond. For bank transactions, you are required to fill out an application form for the purchase of the savings bonds application and then pay with the cashier. The paper savings bonds will be delivered to you by mail within three weeks.
If you want to do an online transaction, you can also check on the TreasuryDirect website and buy directly with the US Treasury Department. You would be required to give up important information, so have with you your state identification number, tax identification number, social security number, driver’s license number, bank account and routing number. You would also be required to enter an email account to receive confirmation on the opening of your account. Then simply click the “Submit” button for the Treasury to open an account. Check your email for your account information. An access card from the Treasury will be sent through regular mail and when you receive the access card and together with your account information such as the account number and password, you can now buy US savings bonds directly from the US Treasury.
Step 2
What US savings bonds to buy? - In the United States, there are two types of savings bonds that you can buy and these are the Series I and the Series EE. At present, these are the only available bonds since the Series E was changed to Series EE and the Series H/HH bonds do no longer exist since September of 2004.
The Series I offers an attractive interest rate and is indexed based on the urban Consumer Price Index for inflation. This type of bond also offers tax deferments and interest compounds until the redemption of the bond. The Series EE on the other hand is relatively a fixed rate bond that pays lower than the Series I bond but it offers the same tax preferential treatment and interest rates are based on the US treasury’s 10-year average for the preceding month.
Step 3
How to authorize savings bonds deductions? - For those who are into the US savings bonds payroll savings plan, the bonds that you purchase through your employer is automatically deducted through payroll deduction after you accomplish your payroll savings authorization form which include how much you want to be deducted for every pay period, the bond denomination, the owner of the bond, your social security number, your address, date you want the allotment to start, and your signature. For TreasuryDirect transactions, register in the US Treasury’s Direct payroll option in order to allow the Treasury to automatically make deductions from your savings and checking accounts for the purchase of savings bonds.
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