Understanding the Confusion Around Fidelity Savings Bonds

Fidelity savings bonds is a term that creates confusion for many people because it can refer to two completely different financial products. Here’s what you need to know:

Key Distinctions:

• U.S. Savings Bonds – Government-issued investment securities (Series EE and I bonds) that must be purchased through TreasuryDirect
• Fidelity Bonds – Business insurance that protects companies from employee theft and dishonesty
• Treasury Securities Through Brokerages – T-bills, notes, and bonds available through investment platforms like Fidelity

What You Can’t Get:
You cannot purchase U.S. Savings Bonds through any brokerage account, including Fidelity. These must come directly from the U.S. Treasury.

What You Can Get:
Through brokerages, you can buy other Treasury securities like bills, notes, and bonds on the secondary market.

When people search for “fidelity savings bonds,” they’re usually looking for one of three things: government savings bonds as investments, Treasury securities available through Fidelity’s brokerage platform, or business protection through fidelity bonds (surety bonds).

As someone who has helped thousands of business owners steer complex financial requirements, I’ve seen this confusion – especially when contractors and small business owners need surety bonds but get overwhelmed by investment terminology. My experience in scaling financial services companies has taught me that fidelity savings bonds searches often lead people down the wrong path entirely.

Decoding the Term: Investment Products vs. Business Protection

The confusion around fidelity savings bonds makes perfect sense when you realize people are actually searching for three completely different financial products. Let me walk you through each one so you can find exactly what you need.

U.S. Savings Bonds: The Investment

When most people think of savings bonds, they’re picturing the classic government-backed investments their grandparents used to buy. U.S. Savings Bonds are debt securities issued by the U.S. Department of the Treasury – basically, you’re lending money to the government, and they pay you back with interest.

There are two main types you can buy today:

Series EE Bonds work like a long-term savings account with a guarantee. You buy them at half their face value, and they earn interest monthly (compounded every six months). The government promises these bonds will double in value within 20 years, even if interest rates stay super low. They keep earning interest for up to 30 years total.

Series I Bonds are the inflation fighters. Their interest rate adjusts every six months based on the Consumer Price Index, which means your money keeps up with rising prices. Think of them as your hedge against inflation eating away at your savings over time.

Here’s the key point that trips people up: You cannot buy U.S. Savings Bonds through any brokerage account – not through Fidelity, not through anyone else. New electronic Series EE and I bonds must be purchased directly from the U.S. Treasury through their TreasuryDirect website. It’s the only authorized way to buy them.

Marketable Securities Available Through a Brokerage

Now, while you can’t get actual savings bonds through a brokerage, platforms like Fidelity offer plenty of other Treasury securities. These are called “marketable” securities because they can be bought and sold on the open market after they’re issued.

Through a brokerage account, you can purchase Treasury Bills (T-bills) with maturities from 4 to 52 weeks – these are sold at a discount and you get the full face value at maturity. Treasury Notes (T-Notes) run for 2 to 10 years and pay interest every six months. Treasury Bonds (T-Bonds) are the long-term players with 20 and 30-year maturities.

For inflation protection similar to I bonds, there are Treasury Inflation-Protected Securities (TIPS) available in 5, 10, and 30-year maturities. The principal adjusts with inflation, and you get interest payments on that adjusted amount.

Treasury STRIPS are an interesting option – they’re zero-coupon bonds created by separating the interest payments from existing Treasury securities. You buy them at a deep discount and receive the full face value at maturity, with terms ranging from 6 months to 30 years.

You can buy these through Fidelity’s Fixed Income, Bonds & CDs platform, either as new issues at government auctions or on the secondary market where previously issued bonds are traded.

Fidelity Bonds: The Business Protection

Here’s where things get completely different. A Fidelity Bond has absolutely nothing to do with investing or saving money. It’s actually a type of business insurance that protects your company from employee theft and dishonesty.

Think of it as a safety net for your business assets. If an employee steals money, commits fraud, or embezzles funds, a Fidelity Bond reimburses your business for those losses. It’s employee dishonesty insurance, pure and simple.

This is actually a type of surety bond that covers internal risks – the people you trust with access to your cash, inventory, or sensitive information. Unlike investment bonds that pay you interest over time, a Fidelity Bond provides a payout only if you suffer a covered loss due to employee misconduct.

For businesses handling cash, managing inventory, or dealing with sensitive financial information, this type of protection is essential for risk management and maintaining financial stability.

A Guide to U.S. Treasury Investments

When you’re searching for fidelity savings bonds, you might actually be looking for the stable, government-backed investment options that Treasury securities provide. Whether you want steady income, long-term growth, or protection against inflation, U.S. Treasury investments offer something for every conservative investor.

Let me walk you through the different types of Treasury securities available and how they can fit into your investment strategy.

Types of U.S. Treasury Securities

The Treasury Department offers several types of securities, each designed for different investment goals and time horizons. All Treasury securities have a minimum denomination of $1,000 face value, making them accessible to most investors.

Treasury Bills (T-Bills) are your short-term option, with maturities ranging from 4 to 52 weeks. These are perfect if you need a safe place to park money for a few months. You buy them at a discount to their face value – so you might pay $980 for a $1,000 T-bill and receive the full $1,000 at maturity. The $20 difference is your interest.

Treasury Notes (T-Notes) bridge the gap between short and long-term investing, with 2 to 10-year maturities. These pay you interest every six months, making them popular with income-focused investors. If you buy a $1,000 T-Note with a 3% coupon rate, you’ll receive $15 every six months until maturity.

Treasury Bonds (T-Bonds) are the long-term champions, offering 20 and 30-year maturities. Like T-Notes, they pay semi-annual interest, but they’re ideal if you’re planning for retirement or other long-term goals. The longer maturity typically means higher interest rates to compensate for the extended commitment.

Treasury Inflation-Protected Securities (TIPS) are brilliant for protecting your purchasing power. Available in 5, 10, and 30-year maturities, these bonds adjust their principal value based on inflation. When prices rise, your bond’s value rises too, and you earn interest on that adjusted amount.

Treasury STRIPS are unique zero-coupon bonds with 6-month to 30-year maturities. They’re created by separating the interest payments from existing Treasury securities. You buy them at a deep discount and receive the full face value at maturity – all your interest comes as one lump sum at the end.

How Interest is Paid: Coupon vs. Discount Bonds

Understanding how you’ll receive your returns is crucial for planning your cash flow and tax strategy.

Coupon bonds work like traditional bonds from decades past. Most Treasury notes, bonds, and TIPS fall into this category. They pay a fixed interest rate (called the “coupon rate”) on their face value at regular intervals – typically every six months. The term “coupon” comes from the old days when bond certificates had actual paper coupons that you’d clip and present to collect your interest payments.

For example, if you own a $1,000 Treasury bond with a 2% coupon rate, you’ll receive $10 every six months ($20 annually). At maturity, you get your original $1,000 back. This predictable income stream makes coupon bonds attractive for retirees and others who need regular cash flow.

Discount bonds take a different approach. Treasury bills and STRIPS are sold at prices below their face value, and you receive the full face value at maturity. The difference between what you pay and what you receive is your interest – it’s called Original Issue Discount (OID). There are no regular payments along the way; all your returns come as a lump-sum payment at maturity.

This structure can be perfect if you’re saving for a specific future expense, like a child’s college tuition or a home down payment. You know exactly how much you’ll receive and when.

Tax Implications for Bond Investors

The tax treatment of Treasury securities can actually make them more attractive than they first appear, especially if you live in a high-tax state.

U.S. Savings Bonds (Series EE and I) offer some unique tax advantages. The interest you earn is subject to federal income tax but completely exempt from state and local taxes. This exemption can add significant value if you live in states like California or New York with high income tax rates.

You also get flexibility in when you report the interest. You can choose to report it annually as it accrues, or defer reporting until you redeem the bonds, they mature, or you dispose of them. Most people choose to defer, which provides a form of tax deferral.

The Education Savings Bond Program offers an even better deal for qualified expenses. You may be able to exclude some or all of the interest from your federal income tax if you use the proceeds for qualified higher education expenses for yourself, your spouse, or dependents. This exclusion does have income limits based on your Modified Adjusted Gross Income (MAGI), and you’ll need to file Form 8815 to claim it. You can learn more about using I Bonds for education on the Treasury’s website.

Marketable Treasury securities (T-bills, notes, bonds, TIPS, and STRIPS) share the same state and local tax exemption as savings bonds, but they’re all subject to federal income tax.

TIPS have a unique tax consideration that catches some investors off guard. When inflation increases the principal value of your TIPS, that increase is taxable in the year it occurs – even though you won’t receive that money until maturity. This “phantom income” means you might owe federal tax on money you haven’t actually received yet. It’s something to consider when deciding between TIPS and other inflation hedges.

Understanding Fidelity Bonds and Other Surety Bonds for Your Business

While you can’t get “fidelity savings bonds” for investment, a Fidelity Bond is a crucial tool for protecting your business assets. Here’s what you need to know.

What is a Fidelity Bond?

A Fidelity Bond is essentially your business’s insurance policy against the unthinkable – when trusted employees betray that trust. This specialized coverage protects your company from financial losses caused by dishonest acts like theft of money, securities, or other property, as well as fraud, forgery, or embezzlement. You might also hear it called employee dishonesty insurance or commercial crime insurance.

What makes a Fidelity Bond different from other insurance is that it provides first-party coverage. This means it protects your business directly from losses, not from claims made by outsiders. Think of it as a financial shield specifically designed to guard your company’s assets from internal threats – those unfortunate situations where someone on the inside decides to help themselves to what isn’t theirs.

Unlike bonds that protect the public or your customers, a Fidelity Bond exists solely to safeguard your business assets from people who work for you. It’s an uncomfortable reality, but statistics show that employee theft costs U.S. businesses billions annually, making this protection more important than many business owners realize.

Do You Need a Fidelity Savings Bond or Another Surety Bond?

The word “bond” covers a lot of ground in the business world, and it’s easy to get confused about which type you actually need. While a Fidelity Bond handles internal risks from your own employees, many businesses require other surety bonds to operate legally, win contracts, or protect the public.

Here’s how the main types break down:

Bond Type	Purpose	Protects	Common Use Cases
Fidelity Bond	Protects your business from employee dishonesty (theft, fraud).	Your business assets	Any business with employees handling money/assets.
License & Permit Bond	Guarantees your business will comply with specific state or local laws and regulations.	The public (customers, government)	Contractors, auto dealers, mortgage brokers, freight brokers.
Performance Bond	Guarantees a contractor will complete a project according to contract terms.	Project owner (obligee)	Construction projects, service contracts.

License & Permit Bonds are probably what most small businesses actually need when they search for bonds. These guarantee you’ll follow the rules and regulations in your industry. If you’re a contractor in Texas, for example, you might need a contractor license bond to get your permits.

Performance Bonds come into play when you’re bidding on larger projects. They tell your potential client that if you don’t complete the work as promised, the surety company will step in to make things right.

At BEST SURETY BOND COMPANY, we specialize in helping businesses get the License & Permit Bonds and Performance Bonds they need to operate legally and grow their business. We understand that while a Fidelity Bond protects your internal finances, these other surety bonds are what actually keep your doors open and help you win new contracts.

How to Get a Surety Bond for Your Business

Getting a surety bond doesn’t have to be complicated or time-consuming. Whether you need a License & Permit Bond, a Performance Bond, or any other type of surety bond, the process can be surprisingly straightforward when you work with the right partner.

At BEST SURETY BOND COMPANY, we’ve streamlined everything into a simple 3-step process that gets you bonded quickly and affordably.

Fast approval is our specialty. We offer instant online approvals for many bond types, with same-day issuance available for most situations. We know that when you need a bond, you usually need it yesterday – especially contractors waiting to start projects or businesses trying to get their licenses approved.

Low rates are guaranteed because we understand that bond premiums can impact your bottom line. Your premium (the fee you pay for the bond) depends largely on your credit score and financial history. With good credit, you might pay as little as 1% of the bond amount – so a $25,000 bond could cost just $250 annually. Even with less-than-perfect credit, we work to find you the most affordable options, typically ranging from 1-15% of the bond amount.

Our online application process means you can get a quote and apply from anywhere, anytime. No need for endless paperwork or scheduling appointments during business hours. Just a few clicks on our website, and you’re on your way to getting bonded.

We’ve bonded over 10,000 clients across all 50 states, and our BBB Accreditation reflects our commitment to excellent service. Whether you’re in Houston or anywhere else in the USA, we can help you get bonded today with the speed and affordability your business deserves.

Frequently Asked Questions about Fidelity Savings Bonds

I get these questions almost daily from business owners and investors who are trying to make sense of the fidelity savings bonds terminology. Let me clear up the confusion with straight answers to the most common questions.

What is the difference between a Fidelity Bond and a U.S. Savings Bond?

This is probably the most important distinction to understand. A Fidelity Bond is actually a type of business insurance that protects your company from employee theft, embezzlement, and other dishonest acts. Think of it as a safety net for your business assets against internal threats.

A U.S. Savings Bond, on the other hand, is a government-issued investment product where you’re essentially lending money to the U.S. Treasury in exchange for interest payments. It’s a personal investment tool, not business protection.

The confusion happens because both use the word “bond,” but they serve completely different purposes. One protects your business from financial losses, while the other helps you grow your personal savings. It’s like comparing car insurance to a certificate of deposit – both are financial products, but they do entirely different things.

Can I buy U.S. Savings Bonds through a Fidelity brokerage account?

No, you cannot purchase new U.S. Savings Bonds (Series EE and I) through any brokerage account, including Fidelity. These bonds must be bought directly from the U.S. Treasury through their TreasuryDirect website.

However, you can buy other U.S. Treasury securities through a Fidelity brokerage account. These include Treasury bills, notes, bonds, TIPS, and STRIPS – all available either as newly issued securities through government auctions or on the secondary market where previously issued bonds are traded.

This is another source of confusion when people search for fidelity savings bonds. They might be looking for government bonds available through Fidelity’s platform, but actual savings bonds aren’t part of that offering.

What are the advantages of using I-bonds for an emergency fund?

I-bonds can be a smart choice for part of your emergency fund, especially the portion you don’t need immediate access to. Here’s why they work well:

The biggest advantage is inflation protection. I-bonds adjust their interest rate every six months based on the Consumer Price Index, which means your money keeps pace with rising prices. This is huge compared to regular savings accounts that might not even keep up with inflation.

Tax benefits are another win. The interest you earn is tax-deferred at the federal level until you cash them in, and it’s completely exempt from state and local taxes. If you use the money for qualified education expenses, you might avoid federal taxes entirely (subject to income limits).

Safety is guaranteed since they’re backed by the full faith and credit of the U.S. government. You won’t lose your principal investment.

But there are some important limitations to consider. You cannot touch your I-bonds for the first 12 months after purchase. If you redeem them before five years, you’ll lose the last three months of interest as a penalty. This makes them less liquid than a traditional savings account.

There’s also an annual purchase limit of $10,000 per person through TreasuryDirect (plus $5,000 via tax refund), so it takes time to build up a substantial emergency fund this way.

Many financial experts suggest using I-bonds for about 75% of your emergency fund (the long-term portion) and keeping 25% in a high-yield savings account for immediate access. This gives you both inflation protection and liquidity when you need it most.

Conclusion

Navigating bonds can feel overwhelming, especially when terms like “fidelity savings bonds” seem to mean different things depending on who you ask. Throughout this guide, we’ve untangled the confusion between U.S. Savings Bonds – those stable government investment vehicles you buy through TreasuryDirect – and Fidelity Bonds, which are actually critical surety products that protect your business from internal risks like employee theft.

The truth is, most people searching for “fidelity savings bonds” are really looking for one of three things: a safe investment option, Treasury securities they can trade through a brokerage, or business protection they can count on. While investment bonds help you grow your money over time, Fidelity Bonds serve a completely different purpose – they’re your safety net against the financial damage that dishonest employees can cause.

If your goal is to secure your business assets with reliable protection, working with a trusted expert makes all the difference. At BEST SURETY BOND COMPANY, we’ve spent years helping business owners understand exactly what they need. We don’t deal in investment bonds, but we are your go-to experts for all your business’s surety bond requirements.

Whether you need a License & Permit Bond to get your business up and running legally, a Performance Bond for your next big contract, or a Fidelity Bond to protect against employee dishonesty, we’re here to guide you through the process. Our combination of fast approvals, low rates, and genuine commitment to customer service has made us Houston’s trusted surety provider with national reach.

We understand that when you’re running a business, time is money. That’s why we’ve streamlined everything to get you bonded quickly and affordably. With over 10,000 clients bonded and BBB Accreditation backing our reputation, we’re licensed in all 50 states and ready to help you protect what you’ve worked so hard to build.

Get Your Instant Surety Bond Quote Today and experience the speed and convenience of working with surety bond specialists who actually understand your business needs.