Savings Bond

Definition

A registered, non-callable, non-transferable bond issued by the U.S. Government, and backed by its full faith and credit. Savings bonds differ from other Treasury securities in several ways. Savings bonds are non-marketable, meaning that they cannot be bought and sold after they are purchased from the government; therefore, there is no secondary market for savings bonds. The tax benefits associated with savings bonds are significant. Like all treasury securities, they are exempt from state and local taxes, but in the specific case of savings bonds, all federal taxes may be deferred until the bond is redeemed.
Therefore, even though interest will accrue, no taxes will be due until that money can be accessed. Additionally, if the money received at redemption is used to pay tuition expenses for the holder, a spouse or a dependent in the same year, the interest earned may be exempt from federal taxes as well. Face values range from $50 to $10,000. also called U.S. Savings bond.

Use Savings Bond in a sentence

In order to help save for college, Chelsie has decided to put her money made from her side business into savings bonds.

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The savings bond was sufficiently large enough to represent enough of an investment to allow us to focus on our taxes now.

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When I was born, my Great Uncle Jed sent me a savings bond he had bought from the government to help me pay for my future education.

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Canada savings bond Series EE bond