U.S. Savings Bonds are issued by the Treasury Department and are backed by the Federal government. No matter what happens to regular banks, even if the FDIC (Federal Deposit Insurance Corporation) collapses and your regular deposits over $100,000 fail, you will still be eligible to redeem your savings bonds from the United States government.

EE Bonds are reliable, low-risk government-backed savings products that you can use to supplement your retirement income. Series EE Bonds purchased on or after May 1, 2005, earn a fixed rate of return, letting you know what the bonds are worth at all times.

EE Bonds purchased between May 1997 and April 30, 2005, are based on 5-year Treasury security yields and earn a variable market-based rate of return. E Bonds are the predecessor to EE Bonds and are no longer issued by the U.S. Treasury.

You can purchase, manage, and redeem electronic EE Bonds safely through a personal TreasuryDirect account. A new program called SmartExchangeSM allows TreasuryDirect account owners to convert their Series E, EE and I paper savings bonds to electronic securities in a special Conversion Linked Account in their online account.

Individuals, corporations, associations, public or private organizations, and fiduciaries can own paper Series EE/E Bonds. At this time, only individuals can open a TreasuryDirect account and own electronic savings bonds.

You can own U.S. Savings Bonds if you have a Social Security Number and you’re a resident of the United States, citizen of the United States living abroad (must have U.S. address of record), civilian employee of the United States regardless of residence, and unlike other securities, minors may own U.S. Savings Bonds.

Through your TreasuryDirect account - which is established using your name and social security number, bank information, driver’s license and e–mail address – you can invest in electronic savings bonds (also referred to as book–entry savings bonds) each calendar year by purchasing as much as:

* $5,000 in Series EE Bonds, and
* $5,000 in I Series Bonds.

You may also invest the same amount in paper savings bonds — using your name and social security number — by purchasing as much as:

* $5,000 in Series EE Bonds (which is equivalent to $10,000 face amount), and
* $5,000 in I Series Bonds.

When you use savings bonds during retirement, you can:

* Avoid dipping into your retirement accounts early by using your bonds instead.
* Defer paying taxes on the interest that your bonds earn until you redeem them.
* Cash bonds when you retire and report the tax-deferred interest as income at that time.
* Savings bonds are backed by the full faith and credit of the United States government.

EE bonds pay interest rates based on current market rates, also up to 30 years. The current rate is 3.00%, but this is in constant fluctuation. You can buy these for a minimum of $50 (costing $25 to buy and then accruing to the full value over at least 5 years), and going up to $10,000. They are definitely more complicated than I series savings bonds, and are much better for longer-term investing because their ownership minimum time period is at least 1 year.

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