By : Hadley Russell.  A bond is a formal agreement where the borrower, in this case is the federal government, can use your money for a set amount of.

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Presentation transcript:

By : Hadley Russell

 A bond is a formal agreement where the borrower, in this case is the federal government, can use your money for a set amount of time and you, as the lender, will get paid a specific amount of interest in return.

Series EE savings bond. this is a standard savings bond. Series EE bonds purchased on or after May 1, 2005, earn a fixed rate of interest. Electronic EE Bonds these bonds can be purchased directly from Treasury Direct Online. Electronic bonds are sold at face value, which means you pay $25 for a $25 bond, and it is worth its full value when it is available to be redeemed. These bonds can be purchased for any dollar amount of $25 or more. The maximum purchase per calendar year is $5,000.

 A savings bond can be held up to 30 years, therefore it’s long term.  The risk of doing this kind of bond has very low because there is almost no chance you wouldn’t get your money back -

 The rate of interest is about 3% or more

 You can buy government-issued U.S savings bonds from almost any financial institution or directly from the government.

 Diversify your risk. If you already have investments in stocks and bonds, you may want to invest in savings bonds. Doing so adds a no-risk element to your investment portfolio.  End up with a safe investment. In exchange for a low return, savings bonds offer absolute safety for the principal investment; they’re absolutely no-risk investments.  Avoid paying any sales commission. Investing in saving bonds doesn’t require the services of a broker to help you purchase them.

 Face penalties for early redemption. If you cash in your Series EE bonds after you’ve held them for six months, you’ll pay three months’ worth of interest.  Need to be careful when you redeem your bonds. Make sure that you know when interest is posted. If you redeem a bond right before interest is posted, you won’t reap your interest payment. If you redeem your bond early in the same month that interest is posted, you may lose six months’ worth of interest.