Savings Bond

Savings Bond Meaning:
In deposit terminology, the term Savings Bond refers to a non transferable, non-negotiable government issued Treasury bond. U.S. Savings Bonds are offered in denominations ranging from $50 to $10,000.

Savings Bond Example:
For example, a Savings Bond will often be sold at a discount to its face value, with the respective interest rate pegged to U.S. Treasury securities. Income from a Savings Bond will often be exempt from state and local income taxes and will have Federal taxes deferred until the bond is redeemed. Savings Bonds generally come in different denominations and maturities, with the Series EE bond being the most popular bond for individual investors that has a maturity of thirty years. Another type of Savings Bond includes the Series I bond, which is sold at full face value and offers a variable interest rate that is directly correlated with the current inflation rate.