US Savings Bonds

Posts Tagged ‘us savings bond face value’

Question: Why would anyone buy US Savings Bonds at face value?

I just found out today that people can buy Savings Bonds from the US Treasury at face value. My question is: WHY would anyone want to do that when they can reap interest off from other types of treasury securities?
I have a BBA in finance. I literally had someone just tell me they were given a bond as a gift when they were younger that was bought at face value.

Answer: Yes, you can buy them at face value. They still earn the pitiful interest rate same as if you had bought them at 1/2 face value. Unlike other treasury securities which are sold in $1000 denominations, Savings Bonds are sold in $25 denominations. That is one of the reasons people buy them. Another reason might be tradition. For a long time people bought Savings Bonds for themselves and for their children. And I suppose they passed the tradition on to their children.

Bipartisan Fiscal Commission Third Meeting