What is ‘Savings Bond Plan’
A program that allows employees to purchase U.S. savings bonds, such as the Series EE and Series I bonds, through payroll deductions. Money is set aside from each paycheck, and when enough money has accumulated, the company purchases a savings bond on the employee’s behalf. Paper bonds are mailed directly to employees from the government, or are mailed to the employee’s company for distribution. The plan may only be available to certain employees, such as those who work for the company full time.
Explaining ‘Savings Bond Plan’
Series EE paper bonds can be purchased in denominations of $50, $75, $100, $200, $500, $1,000, $5,000 or $10,000 and can be purchased for half of their face value (i.e. a $10,000 EE bond costs $5,000). Series I bonds can be purchased in denominations of $50, $75, $100, $200, $500, $1,000 or $5,000 with a purchase price equal to the denomination. Bonds may be registered to a single owner, co-owners or a single owner with a single beneficiary who will receive the bond upon the bondholder’s death.
Further Reading
- Financial literacy and retirement planning: New evidence from the Rand American Life Panel – papers.ssrn.com [PDF]
- Financial literacy and retirement planning in the Netherlands – www.sciencedirect.com [PDF]
- How ordinary consumers make complex economic decisions: Financial literacy and retirement readiness – www.worldscientific.com [PDF]
- Financial literacy, retirement planning and household wealth – academic.oup.com [PDF]
- Naive diversification strategies in defined contribution saving plans – www.aeaweb.org [PDF]
- Just keep my money! Supporting tax-time savings with US savings bonds – www.aeaweb.org [PDF]
- Financial literacy and planning: Implications for retirement wellbeing – www.nber.org [PDF]
- Household saving behavior: The role of financial literacy, information, and financial education programs – www.nber.org [PDF]
