- Saving bonds represent a loan of a specific sum made by an individual or a company to the government. Savings bonds can be purchased in paper or electronic format. Denominations for paper bonds include $50, $75, $100, $200, $500, $1,000, $5,000, and $10,000 amounts. Electronic bonds can be purchased in specific amounts over $25 down to the penny. An electronic bond, for instance, could be purchased for $50.26.
- Bonds can be purchased at a number of institutions, including Treasury Direct, mail-in orders, banks and other financial institutions, and some Internet banks. When purchased, the date of the bond issued will be on the date of purchase, rather than on the date that it was issued. This means that you won't lose any interest. Savings bonds purchases, both paper and electronic, are capped at $5,000 for a calendar year.
- You will need to provide your Social Security number when purchasing a savings bond. Bonds can be purchased by both United States citizens living in the United States as well as abroad. Private employees of the United States also can purchase savings bonds.
- Savings bonds cannot be cashed at a check cashing store. They can only be cashed at specific financial institutions, such as banks and financial firms, such as investment companies. Check cashing stores aren't recognized by the United States government as a financial firm suitable for the cashing of a savings bond. Because the government does not keep a current list of which financial institutions cash savings bonds, if you are in doubt, give the bank a call to see if it will cash your savings bond for you. When cashing your bond, you again will have to provide your Social Security number for tax purposes.