What Are U.S. Savings Bonds?

A U.S. savings bond is an investment option from the federal government for which individuals pay face value and earn interest, according to the U.S. Securities and Exchange Commission. The U.S. government essentially borrows the money for spending needs and pays the buyer back with interest upon redemption.

Savings bonds were once sold as paper documents at financial institutions, but in 2012 the U.S. Department of the Treasury switched to an electronic format that is only available online, notes the Treasury Department's Ready.Save.Grow. Savings bond holders have the option of redeeming at any time for the face value plus the interest earned, states the SEC. If a savings bond is redeemed in the first five years, the holder forfeits the interest earned in the last three months.

There are three types of U.S. savings bonds that can be purchased by consumers as of January 2015. These savings bond types are the Series EE, the Series I and the Patriot Bond. The Patriot Bond was first issued on the three month anniversary of the September 11 terrorist attacks. Savings bonds can be purchased at most local banks in the United States, and consumers can also make purchases online.

The value of a U.S. savings bond can be determined using the Savings Bond Calculator offered by the Department of the Treasury. In order to use this tool, consumers will need the series and denomination of the bond. Consumers also need the issue date that is printed on the bond, as well as its serial number. The tool also allows consumers to determine the value of the savings bond in future or past months by selecting a date ranging from January 1996 to the current rate period.