This page focuses on buying for yourself or a child whose account is linked to yours. If you are planning to give a savings bond as a gift, also see our page on Giving savings bonds as gifts. You can print a certificate announcing your gift. See our selection of announcement cards.
In any one calendar year, you may buy up to $10,000 in Series EE electronic savings bonds AND up to $10,000 in Series I electronic savings bonds for yourself as owner of the bonds. That is in addition to the amount you can spend on buying savings bonds for a child or as gifts.
For example: If you want to buy $50 Series I savings bonds and you ask your employer to send $25 from each paycheck to your TreasuryDirect account, we issue a $50 bond for you after every other payday. You don't have to think about it again or do anything else. You keep getting more savings bonds automatically until you change or end your Payroll Savings Plan.
We may issue multiple bonds to fill your order. The bonds may be of different denominations. We use $50, $100, $200, $500, and $1,000 bonds. Again, the amount of your purchase can be any multiple of $50, from $50 to $5,000. You need to tell us only the amount. We determine denominations.
On Form 8888, you also specify who will own the bonds. That means, you can give paper savings bonds to yourself or to anyone else (as a gift). If you have enough money in your refund, you can buy multiple bonds and, if you wish, you can give them multiple registrations.
In addition to the Treasury, corporate, and municipal bonds described above, there are many other bonds that can be used strategically in a well-diversified, income-generating portfolio. Analyzing the yield of these bonds relative to U.S. Treasuries and relative to comparable bonds of the same type and maturity is key to understanding their risks.
Learning how to buy bonds is an essential part of your education as an investor. A well-diversified portfolio should always strike a balance between stocks and bonds, helping you ride out volatility while still capturing growth along the way.
Buying individual bonds offers unique challenges. In addition to a wide range of moving parts inherent in each bond, the primary market can be difficult to access for all but the wealthiest investors. Meanwhile, the secondary market has less transparent pricing than primary issues.
The easiest way to buy bonds is to invest in bond mutual funds or bond exchange-traded funds (ETFs). Funds own large, diversified fixed-income portfolios comprising hundreds or even thousands of bonds.
Buying individual bonds via your brokerage account is more complicated. Typically online brokers offer access to bond secondary markets, which means that availability and prices wholly depend on existing holders looking to sell.
Some auctions are the original issue (first time), when a specific CUSIP is sold. Some are additional issue (reopenings), when we sell more of a specific CUSIP that was sold before. See more about reopenings below.
When you buy through TreasuryDirect, you must hold new Treasury marketable securities for at least 45 calendar days before transferring or selling them. This holding period does not apply when your new security is bought with proceeds from a reinvestment of a maturing security.
But if you buy and sell bonds, you'll need to keep in mind that the price you'll pay or receive is no longer the face value of the bond. The bond's susceptibility to changes in value is an important consideration when choosing your bonds.
The language of bonds can be a little confusing, and the terms that are important to know will depend on whether you're buying bonds when they're issued and holding them to maturity, or buying and selling them on the secondary market.
Price: This is the amount the bond would currently cost on the secondary market. Several factors play into a bond's current price, but one of the biggest is how favorable its coupon is compared with other similar bonds.
Because bonds with longer maturities have a greater level of risk due to changes in interest rates, they generally offer higher yields so they're more attractive to potential buyers. The relationship between maturity and yields is called the yield curve.
The 2 best-known agencies that rate bonds are Standard & Poor's (S&P) and Moody's Investors Service. They have similar ratings systems, which are based on the issuer's current financial and credit histories.
Companies can issue bonds, but most bonds are issued by governments. Because governments are generally stable and can raise taxes if needed to cover debt payments, these bonds are typically higher-quality, although there are exceptions.
You'll have to pay federal income tax on interest from these bonds, but the interest is generally exempt from state tax. Because they're so safe, yields are generally the lowest available, and payments may not keep pace with inflation. Treasuries are extremely liquid.
These bonds are typically high-quality and very liquid, although yields may not keep pace with inflation. Some agency bonds are fully backed by the U.S. government, making them almost as safe as Treasuries.
Because mortgages can be refinanced, bonds that are backed by agencies like GNMA are especially susceptible to changes in interest rates. The families holding these mortgages may refinance (and pay off the original loans) either faster or slower than average depending on which is more advantageous.
Interest from these bonds is free from federal income tax, as well as state tax in the state in which it's issued. Because of the favorable tax treatment, yields are generally lower than those of bonds that are federally taxable.
These bonds are issued by companies, and their credit risk ranges over the whole spectrum. Interest from these bonds is taxable at both the federal and state levels. Because these bonds aren't quite as safe as government bonds, their yields are generally higher.
A type of investment that pools shareholder money and invests it in a variety of securities. Each investor owns shares of the fund and can buy or sell these shares at any time. Mutual funds are typically more diversified, low-cost, and convenient than investing in individual securities, and they're professionally managed.
Investments in stocks and bonds issued by non-U.S. companies are subject to risks including country/regional risk, which is the chance that political upheaval, financial troubles, or natural disasters will adversely affect the value of securities issued by companies in foreign countries or regions; and currency risk, which is the chance that the value of a foreign investment, measured in U.S. dollars, will decrease because of unfavorable changes in currency exchange rates.
These bonds are typically high-quality and very liquid. Most agency bonds are taxable at the federal and state level. Some are fully backed by the U.S. government, making their credit risk lower than other types of bonds.
These bonds are issued by companies, and their credit risk ranges over the whole spectrum. Interest from these bonds is taxable at both the federal and state levels. Because these bonds aren't as safe as government bonds, their yields are generally higher.
All monetary policy decisions of the Federal Reserve--including buying and selling securities--are made independently of the borrowing decisions of the federal government and are intended solely to fulfill the mandate set out for the Federal Reserve by law--maximum employment, stable prices, and moderate long-term interest rates.
The State does not sell bonds directly. You must buy these bonds through a registered broker/dealer. These bonds may be either newly issued or they may be offered on the secondary market (i.e., bonds that were previously issued that are put up for sale by the owner). The State issues general obligation bonds through either a competitive sale or a negotiated offering. In a competitive sale, the Treasurer's Office accepts bids from municipal underwriting firms to buy the bonds. The underwriting firms, following the purchase, sell the bonds to individual and institutional investors. In a negotiated offering, the Treasurer's Office negotiates terms with an underwriter that is pre-selected in a competitive request for proposal process.
Vermont's Department of Financial Regulation (formerly known as BISHCA) regulates the activities of the financial services industry in Vermont. The department's Securities Division is tasked with the regulation of those offering and selling securities to Vermonters. You may call the Securities Division to discuss any questions or concerns you may have. Dial toll-free in Vermont 1 (877) 550-3907 or (802) 828-3420.
New issue bonds are sold without commission or trading mark-up. They will be most readily available from the firm that is acting as lead manager for a bond issue, or from a firm that is designated as a \"selling group\" member. Depending upon demand for a new issue, availability of bonds can be limited, especially for more popular maturities. Most bonds are issued in denominations of $5,000. Each year the State Treasurer's Office issues special \"citizen bonds,\" available only to Vermont residents, in denominations as low as $1,000.
Secondary, or seasoned, bonds may be available from these same dealers. Bonds purchased in the secondary market are subject to both commissions and dealer mark-ups (i.e., there is a spread between the bid price that the dealer will pay for a bond, and the ask price that a dealer receives for offering a bond).
Oregon bonds are an investment in important public infrastructure and ultimately in our long-term quality of life, and they offer advantages for certain investors. Bonds provide funding for road construction, energy transmission lines, schools, water, and other critical infrastructure projects. Projects on the drawing board include bridges, new buildings and repairs at community colleges and universities, and seismic rehabilitation projects.
Bond investing offers advantages for certain investors, who can earn a rate of return while helping to build a better state. The state generally gives Oregonians who place orders for publicly offered state bonds through a broker top priority over institutional buyers like mutual funds. Learn more about buying Oregon bonds through a retail broker on our FAQ. 59ce067264