Tax Advantages of Savings Bonds- Amanda Brown

The return on your investments can have more to do with just the growth that is generated. For instance, if you don’t have to pay tax on the gain, you will end up with more net spendable funds. It is also possible to attain tax-deferred growth on investments like annuities and savings bonds.In this case, the tax advantages of savings bonds come by way of no taxes on the gain until the time of maturity. This can provide you with more growth over time as compared to a taxable investment.
 Taxable versus Tax-Deferred Growth Both Series EE and Series I savings bonds grow on a tax-deferred basis until they are redeemed, or until the bond reaches maturity. It is important to note, though, that tax-deferred is not the same thing as tax-free. So, you will have to pay tax on the gain when it is withdrawn. Are Savings Bonds a Good Investment for You?While savings bonds offer some nice benefits, they are not right for all investors. To determine whether a Series EE and/or Series I bond will fit with your objectives, contact a retirement specialist.