Investing in bonds by owning a bond fund is easy compared to selecting individual bonds. Few average investors can analyze bonds, so the vast majority investing in bonds buy a mutual fund called a bond fund, and let professional money managers make the selections for them. Hence, when you own a bond fund you own part of a professionally managed portfolio of bonds, often called an income fund.
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The Series EE Patriot Bond is a type of bond that historically has been referred to as a “war bond.” It is meant to show patriotism. After the September 11 attacks, Congress called for the Treasury to issue war bonds again. The front of the bond labels it a “Patriot Bond.” It operates as a regular Series EE savings bond. The money raised by the bonds is deposited into the general fund, and the yield is the same as any other Series EE bond.
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Savings bonds are a type of Treasury security that earns interest for up to 30 years. They are only payable to the person to whom they are registered and can not be resold. You can cash them in after one year, but if you redeem it before five years you will pay a three month interest penalty.
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Series EE Savings Bonds provide a steady low-risk fixed rate of return. Savings bonds are backed by the U.S. Government and can be used towards education, retirement and gifts. Series EE Bonds purchased on or after May 1, 2005 earn a fixed rate of return. This will ensure you know the bonds value at all times. Series EE Bonds that were purchased between May 1997 and April 30, 2005 earn a variable rate of return based on the 5-year Treasury security yields.
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