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Savings BondsSavings Bonds General Information
Savings bonds have benefits that can work for you! We asked savings bond investors about the savings bond features they value. Here’s what they told us. See if bonds might fit your savings needs.
- Safety: Savings bonds are a unique security as safe and secure as the U.S. Treasury. You never have to worry about the safety of your investment. You are paid the principal and interest due you when you cash your bond. Your bonds can be replaced if lost, stolen or destroyed.
- Ease of Purchase: It’s hard to find an easier more affordable way to invest. All you need do is decide how much you want to save every payday and complete your allotment card. Bonds cost as little as $50 for a $100-bond. Your bonds are sent directly to you.
- Tax Advantages: The interest you earn on your Series EE bonds is exempt from State and local income taxes. You can defer Federal income tax until you redeem the bonds or they stop earning interest after 30 years. This means you can plan ahead and choose when might be the best time to realize income for tax purposes. And, since your interest isn’t taxed until you redeem a bond, your savings grow faster because interest compounds on the full value of the bond before taxes.
- Financing Education: Savings bonds can help you save for education. Lower and middle- income investors may be eligible for special tax benefits. If you can qualify, you can exclude all or part of the interest earned on Series EE from income when you cash the bonds to pay for post-secondary tuition and fees.
- Retirement: Savings bonds can be an excellent way to help build savings for retirement. The combination of a thirty-year interest earning life and the other features of bonds make them attractive to many investors.
- Improved Market-Based Rates: Series EE bonds now earn 90% of the average yield on 5-year Treasury securities. Bonds increase in value every month. The rate changes every six months… so your investment always tracks Treasury market yields.
- Liquidity: You can cash Series EE bonds any time after six months. Most investors plan to hold bonds for longer-term goals yet they know they can get their money with interest if they need it. There is a 3-month interest penalty if you redeem your bonds before five years.
Find out more about the features that appeal to you by contacting the University Payroll Services office at 845-2711. We want you to know how Series EE bonds works so you can decide how bonds can fit into your plans. An informed investor is our best customer.
Savings Bonds Guidelines for Purchase and Change
An employee may participate in the savings bonds payroll deduction program by completing the Savings Bond Purchase and Change Form. This form is available at the University Payroll Services Office in room 117 East Wing Sbisa or you may click on Savings Bond Purchase and Change Form at this location.
To purchase a savings bond, do ALL of the following:
- Determine the bond denomination
- Determine the amount to be allotted each payday
- Provide an address
- Indicate a co-owner or beneficiary (if applicable)
- Sign and date the form
- Savings Bond Purchase and Change Form
To cancel a bond, do ONE of the following:
- Send in a handwritten request providing social security number, the effective date, and a signature
- Complete a Savings Bond Purchase and Change Form, provided by the University Payroll Services Office, available below. Choose option (E) - other, and write "Cancel" for the explanation
- Savings Bond Purchase and Change Form