Hawaii annual savings bond
drive kicks off at Hickam AFB

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By Lyn Danninger
ldanninger@starbulletin.com

It was an appropriate theme -- 1940s big band music and patriotic decor at the Hickam Air Force Base Officers Club yesterday -- to kick off the Hawaii portion of the nationwide U.S. savings bond campaign.

Amid the red, white and blue, chairman of this year's local event, Air Force Gen. William Begert, commander of Pacific Air Forces; and national chairman Vance Coffman, chairman and chief executive officer of giant defense contractor Lockheed Martin, noted that savings bonds are still the most widely held security in the nation. Americans already have invested $190 billion in savings bonds, they said.

About 6 percent or the population, or about 11 million people, own bonds.

Since the events of Sept. 11, and a subsequent surge in patriotism, more people are making the purchase, Begert said. The federal government has been pushing the bonds, with a special designation as Patriot Bonds, as a way to help fund the war on terrorism.

"Buying savings bonds is clearly one good way to support the country," Begert said.

Savings bonds have been around since the early 1940s, when President Franklin D. Roosevelt first asked people to invest in America. Over the years many people have come to think of savings bonds as something you get as a gift from grandparents, rather than part of an investment strategy.

The interest on savings bonds is exempt from state taxes while federal income taxes are deferred until the bonds reach maturity or are redeemed. Savings bonds also can be used to pay for certain higher education expenses which may allow interest earned to be excluded from federal income taxes.

They can be purchased for as little as $25. Series I bonds are sold at face value and are meant to be longer-term inflation-adjusted investments, whereas Series EE bonds are sold at half their face value.

As much as $15,000 worth of series EE Bonds and $30,000 worth of I bonds can be purchased each year. They can be redeemed any time after six months.

There are three primary ways to register bonds: As a single owner where only the registered owner may cash the I bond; co-ownership where two names appear on the I bond and either person can cash it, and a beneficiary type bond where only the owner may cash the I bond during his or her lifetime. The beneficiary automatically becomes the sole owner of the I bond when the original owner dies.

Bonds can be purchased in a variety of ways either through a payroll savings plan at work, financial institutions or online. Many banks now offer savings bonds as part of their Internet banking services.

Information on savings bonds also can be found on the Internet at www.savingsbonds.gov.