U.S. Savings Bonds

Securities issued by the U.S. Treasury in relatively small denominations for individual investors. Investors who buy U.S. Savings Bonds in effect make a loan to the government, in return for the government's promise (represented by the bond, a nontransferable debt certificate) to repay the loan with interest. The interest is free from state and local taxation. U.S. Savings Bonds are considered to be risk-free investments, since they are backed by the U.S. government.