What is a Series EE savings bond?

A Series EE savings bond is indeed a government-backed savings product designed to offer a low-risk investment option for individuals. These bonds are issued by the U.S. Department of the Treasury and are intended to encourage savings and provide a safe way to grow funds over time.

When an individual purchases a Series EE bond, they are essentially lending money to the U.S. government, which is then obligated to pay back the face value upon maturity, along with interest accrued during the life of the bond. This feature makes the Series EE bond an appealing choice for conservative investors seeking a secure return on their savings.

Additionally, these bonds are often exempt from state and local taxes, and federal taxes on interest can be postponed until the bond is redeemed. This favorable tax treatment further enhances their attractiveness as a savings vehicle.

The other options describe different types of financial products that do not accurately represent a Series EE savings bond. For example, a retirement account involves specific tax advantages and regulation under retirement laws, while stock market investments involve equity ownership in companies and carry higher risk. Real estate investments pertain to physical properties rather than debt instruments like savings bonds. Thus, the defining characteristic of the Series EE savings bond as a government-backed savings product establishes why it is the correct