Tax advantages make U.S. savings bonds extremely appealing. As is the case with all Treasury securities, the interest is exempt from state and local income taxes. Therefore, these bonds may be especially attractive to clients in high-tax states such as California and New York. With EE or I-Bonds, federal income taxes can be deferred until the bonds are cashed in.
Individuals are allowed to buy $30,000 of EE bonds (face value) and $30,000 of I-Bonds each year. A married couple can buy twice those numbers.
Through December 31, 2003, you can purchase savings bonds directly from the federal government with a credit card. Unlike using your credit card for other government services such as paying your income or property taxes, there are no transaction fees for savings bonds purchases. If you have a credit card that earns cash back or airline miles, these perks are just added bonuses to the high rates of return.