UpDate - Vol. 13, No. 27, Page BB-4
April 14, 1994
Buy Bonds
10 good reasons for buying bonds


1. Competitive interest rates
     Series EE U.S. Savings Bonds held five years or longer earn
market-based interest or a guaranteed minimum rate, whichever is higher,
compounded semi-annually. Semi-annual rates are announced May 1 and Nov. 1.

2. Guaranteed minimum return*
     Once purchasers have held an EE Bond for six months, it is guaranteed
a minimum annual rate of 4 percent, compounded semi-annually. Interest is
added to the value of the bond every month.

3. Tax exemptions
     Interest earned on U.S. Savings Bonds is exempt from all state and
local income taxes.

4. Deferred reporting of interest for federal taxes
     Interest earned is not subject to federal income taxes until the bonds
are cashed or reach final maturity in 30 years. Taxes may be deferred
further if bonds are exchanged for Series HH Bonds.

5. Peace of mind in retirement*
     Savings bonds may be cashed to supplement a retirement income. Or, a
regular income may be produced by exchanging Series EE Savings Bonds for HH
Bonds, which pay interest semi-annually. The annual yield on HH Bonds is 4
percent, taxable annually but exempt from state and local income taxes.

6. Cash on demand
     One of the best benefits of U.S. Savings Bonds is cash when the owners
need it. Bonds may be cashed any time after six months from purchase.
Interest accrues monthly for 18 years and there are no penalties associated
with cashing bonds before maturity.

 7. College costs made easier
     U.S. Savings Bonds may provide tax savings when used to finance higher
education. See Treasury Department publication U.S. Savings Bonds for
Education for details.

 8. Easy to buy
     Purchasers can buy Series EE Savings Bonds through a payroll savings
plan at work or through over-the-counter purchases or the bond-a-month plan
at their bank.

 9. Strengthening America
     Buying U.S. Savings Bonds is patriotic. Purchasers earn interest while
helping their country. Savings Bonds sales reduce borrowing costs for the
treasury and taxpayers.

10. No commissions or maintenance fees
     No fees or commissions are paid to buy or redeem savings bonds.

* Bonds issued before March 1993 retain their existing guaranteed minimum
rates until they enter a new extended maturity period.

For more information, write to: U.S. Savings Bond Division, Department of
the Treasury, Washington, DC 20226