Baton Rouge, La. – In response to the amazing outpouring of charity and volunteerism following Sept. 11, the U.S. Treasury recently announced the availability of Patriot Bonds. “Purchasing a Patriot Bond is one way citizens can contribute to the nation’s war effort and save for their futures, too,” said LSU AgCenter family economics specialist Jeanette Tucker.
How to purchase. Patriot Bonds are Series EE savings bonds purchased through financial institutions or over the Internet at the Savings Bonds Direct Web site. Bonds purchased this way will be specially inscribed with the words “Patriot Bond.”
“Money invested in Patriot Bonds is not specifically earmarked for the War on Terrorism, however,” Tucker said, pointing out, “Instead, proceeds from the sale of all Treasury securities, including Patriot Bonds, are deposited in the general U.S. Treasury and spent according to law.”
As such, the funds will contribute to rebuilding and war efforts.
Patriot Bonds can be purchased at any of thousands of financial institutions serving as savings bond agents nationwide. Tucker says to contact your bank, and ask if they offer savings bonds.
Online buyers can order via Savings Bonds Direct at www.savingsbonds.gov.
About the bonds. Series EE savings bond denominations are $50, $75, $100, $200, $500, $1,000, $5,000 and $10,000. The purchase price is half the face amount. For example, a $100 Patriot Bond costs $50.
Series EE bonds earn 90 percent of market yields on five-year Treasury securities. Bonds increase in value every month, and interest is compounded semi-annually.
You can cash in your bond after six months, but bonds cashed in before they are five years old are subject to a three-month interest penalty. EE bonds stop earning interest at 30 years.
Savings bond rates are announced each May 1 and Nov. 1 for the subsequent six months. The earning period for rates announced May 1 runs through October, and for rates announced on Nov. 1, the period runs through April. The current rate is 3.96 percent.
Tax benefits. Tucker reminds purchasers that Series EE bonds are free from state and local income taxes. Federal tax on interest earned can be deferred until you cash in a bond or it reaches its 30-year maturity, whichever happens first.
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