Online Banking

Savings Bonds

Effective 1/1/12, members will no longer be able to buy paper savings bonds at Hopewell Federal or by mail order.  Hopewell Federal Credit Union can still assist you in redeeming U.S. Saving Bonds. Visit to order bonds.

Additional Information

• Electronic savings bonds are secure and convenient to manage in a TreasuryDirect account, and members will no longer have to worry about storing, misplacing, or losing paper savings bonds.

• With a TreasuryDirect account, members can purchase electronic savings bonds:

o as gifts

o convert paper savings bonds to electronic ones

o manage and redeem electronic saving bonds

• Interest paid on these bonds are exempt from state and local income taxes

• For current interest rates you can call 1-800-4US-BONDS (1-800-487-2663), request in writing from The Bureau of Public Debt, Bonds Div., Parkersburg, West Virginia 26106-1328 or get it from the web site

• Savings bonds are not negotiable instruments and cannot be transferred to anyone at will. They may be transferred in limited circumstances, but there may be tax consequences at the time of transfer.

• At the time of purchase, a bond can be registered to:

o Single person (“Single Ownership”)

o Two people (”Co-Ownership”); Either named individual can do whatever they like with bond without consent of the other person; If one dies, the other becomes single owner

o Primary owner and a beneficiary (“Beneficiary”); Bond is marked POD for “payable on death”; Primary owner controls the bond and ownership, including the responsibility of paying taxes on the interest; This passes to the beneficiary if the primary owner dies

• Interest can be excluded if used to pay higher education expenses such as college tuition

• U.S. citizens and residents of any age with a social security number can buy bonds

• There are two (2) types of Savings bonds

• Series EE Bonds-

o They earn market-based rates that change every six (6) months

o There is no way to predict when this bond will reach face value (depends on interest rate; example 5% would reach face value in 14 ¼ years and a bond earning 6% would reach face value in 12 years)

o Series EE Bonds must be held for at least twelve (12) months before they can be cashed.

o After Series EE Bonds mature they will quit earning interest

o If not cashed by the final maturity date, you will end up paying tax on earnings, paying interest and penalties

• I Bonds-

o I Bonds are purchased at face value (denomination)

Earns interest monthly

o Interest is paid when bond is cashed

o Earns interest for up to thirty (30) years

o Interest accrues on the first day of the month and is compounded semiannually

o I Bonds issued after February 2003 must be held for at least twelve (12) months before they can be cashed; bonds issued before February 2003 can be cashed anytime after six (6) months

o If cashed within the first five (5) years, will be penalized by losing three (3) months worth of interest

o Interest can be deferred until the bond is cashed in, or can be declared on your federal tax return as earned each year

o When you cash the bond you will be issued a Form 1099-INT. The owner will declare all interest earned on the bond received over what they paid for the bond

o Interest not yet not declared is known as “tax deferred”