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Savings bonds are quite easy to buy and you can walk into any bank or credit union to buy them. You can even buy savings bonds online through the Treasury Department website, which is extremely easy and simple to follow. In fact, on the Treasury Department website, you can purchase a savings bond in less than 10 minutes.
Interest rates on savings bonds depend on the general market conditions. As interest rates in the market rise, the interest rate paid for savings bonds also increase. During periods where the inflation is high, you will earn more, and the same is true vice versa. In order to get exact information, you will have to visit the Bureau of Public Department’s website to get current interest rates along will historical rates. However, considering that savings bonds are safe investments, interest rates are quite competitive.
It is quite possible for you to get tax benefits from certain savings bonds. One good thing is that savings bonds do not pay periodic interests so there is no income tax to pay on that. Instead, these bonds increase in value over time and you can claim your investment and interest at the time of redeeming the bond or after it matures, which is usually after 30 years of being issued. You have to pay taxes then on the interest earned.
There are, however, some restrictions on redeeming savings bonds. You cannot cash in savings bonds within 6 months or 1 years of issue date. The 6-month restriction for bonds issued before February 2003 and the 1-year restriction for bonds issued after February 2003. In addition, if you cash savings bonds within the first five years of issue, you will not get the last three months’ interest.
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