Savings bonds are a safe, low risk option for saving money. They are considered one of the safest investments to make due to the fact they are backed by the United States Government. The most common form of savings bond is the Series EE.
The Series EE bond can be bought through almost any financial institution such as a bank or credit union. They can even be purchased online through the federal treasury website. Consumers like the Series EE bond because they are affordable. They are replaceable if they are accidentally destroyed or if they are lost or stolen. They can be replaced as long as they have not been cashed. If it can be proven they were cashed by a person who stole them, they can also be replaced.
The Series EE bond is purchased for half of its value. The consumer would purchase a $50 bond for $25. Bonds can be purchased for as much as $10,000 or as little as $25. Series EE bonds bought after 2005 can be redeemed for the full bond price after 20 years, even if the interest rates are very low. If the bonds are cashed within the first 5 years, the last 3 months of interest are forfeited, after five months there are no penalties. If the bonds are cashed early it would not be for the full face value.
Series EE savings bonds are intended to be a long term investment. If a consumer is looking for a fast turnaround investment or needs access to their cash quickly, this would not be a good investment option for them. If they are trying to invest their money for an occasion fairly far into the future such as college education or retirement, than the Series EE bond is probably a good choice in that it is safe and will double in value in 20 years.