Grade 3-5

Buy A Bond, James!: A Lesson on U.S. Savings Bonds

Updated: August 14 2019,
Author: Mickey Ebert

Students will find out what savings are and will be introduced to U.S. Savings Bonds.


bondWhy do people save? How do you save? How do you save and make money at the same time? We will find answers to these questions and more on this lesson on saving and U.S. Savings Bonds.

Learning Objectives

  • Explain why people buy savings bonds.
  • Describe how the government uses borrowed money.

Resource List


Tell the students that when people save money, they are not spending it! There are many ways to save money. Quiz the students on how they save money? If they do save money, ask them if they save money in a piggy bank? Ask the students if they put $50.00 in a piggy bank and they forget about it for five years, how much money will the have in their piggy bank when they remember it? Wait for answers, then if someone answers $50.00, tell them that that’s correct, you will have the same $50.00. No more, no less!

piggy bankAsk the students what would happen if they took their $50.00 and lent it to the United States government for five years? Would they believe that their $50 then could earn them extra money? Now instead of $50 they would have around $55? Ask the students how this could happen?

Tell the student that this could happen because the government would pay them INTEREST. Explain to them that INTEREST is what the borrower pays to the lender for the use of the lender’s money. In this case the borrower is the government. And the interest is a way of saying “thank you” to the person who has let the government use his or her money.

Ask the student if they know why the government needs to borrow money? Tell them that the government uses money to pay the people who work for the government, including those who defend our country. The government also borrows money to make payments to people who are retired, and to others who need the help. Our government pays for all the buildings, equipment, ships, and military bases that the government owns. The list goes on and on!

Tell the students that some of the money the government needs to run the country comes from taxes that everyone pays. But sometimes the government needs to borrow money from people. One of the ways that the government does that is by selling savings bonds.

Go to Learn About Bonds and find out what a savings bond is. To see a savings bond, click here.

Ask the students if they found out why people buy bonds? Tell the student that this is one way to save money and earn interest. The government borrows your money and uses it to run the government.


Money not spent is called savings. You can take your savings and buy a U.S. Savings Bond. The government will pay you extra money called interest if you buy a savings bond. The government will take the money it borrows from you and use it to run the country.

Extension Activity

When the students are finished with the lesson, let them know that they can visit the site entitled Fun Facts to find more “Fun Facts” pertaining to savings bonds.

Also, the game options below can be printed out and given to the students for a fun activity:


Pretend you are grandmother or grandfather. You have $100 to give to a grandchild. Write a letter to your grandchild trying to persuade him or her to save all or part of the money by buying a savings bond. Be sure to let your grandchild know how the government is going to spend the borrowed money.