You can defer Federal income tax until you redeem the bonds or they stop earning interest after 30 years. This means you can plan ahead and choose when might be the best time to realize income for tax purposes. And, since your interest isn't taxed until you redeem a bond, your savings grow faster because interest compounds on the full value of the bond before taxes. Lower and middle income investors may be eligible for special tax benefits. If you qualify, you can exclude all or part of the interest earned on Series EE bonds from income when you cash the bonds to pay for post-secondary tuition and fees.
Savings bonds can be an excellent way to help build savings for retirement.
The combination of a thirty year interest earning life and the other features of bonds make them attractive to many investors. Bonds increase in value every month. There is a 3-month interest penalty if you redeem your bonds before five years. Get a hold of the new I Bond from the U.S. Treasury. They re sold at face value and grow with inflation-protected earnings for up to 30 years.