Personal finance experts strongly recommend diversifying one’s portfolio
of investments. U.S. savings bonds are ideal for investors who prefer
strong risk management. Even if you’ve previously purchased U.S.
savings bonds, you might be surprised at the modern upgrades they’ve
received. Just like the way that
credit union members have benefited from online banking, U.S. savings bond investors
can now complete their transactions online.
Understanding Your Investment
When you purchase a U.S. savings bond, your investment is backed by the
U.S. Treasury Department. Your interest will accrue monthly and compound
semi-annually. Although you can redeem a savings bond any time after 12
months have passed, it’s financially prudent to wait until it matures
to get the most out of your investment. The interest you earn on a U.S.
savings bond is exempt from state and local taxes, and federal taxes are
deferred until the date of maturity or the date of redemption. U.S. savings
bonds are a very safe investment because they are all registered. Even
if you decide to purchase paper bonds, they are replaceable if they become
lost, stolen, or destroyed.
Purchasing U.S. Savings Bonds
With the shift toward electronic transactions, the only way to purchase
paper bonds is with your federal tax return. When you file your federal
tax return, submit IRS Form 8888. This allows you to purchase a Series
I bond with your tax refund. It will be mailed to you. To
purchase a savings bond electronically, you will need to open a TreasuryDirect account through the U.S. Treasury
Department. You can use your TreasuryDirect account to purchase Series
I or Series EE bonds. You are allowed to purchase up to $10,000 of each
type every year.
Redeeming U.S. Savings Bonds
Electronic U.S. savings bonds are easily redeemed with your TreasuryDirect
account. Authorize your redemption online and have the funds deposited
into your credit union account. If you have paper bonds, take them to
a credit union branch for redemption.
GCS Credit Union in O’Fallon offers a complete line of financial
products and services to our members. You’re welcome to cash U.S.
savings bonds at our credit union and to request financial guidance about
how savings bonds fit into your wealth management strategy. Give us a
call today at (618) 797-7993.