Savings Bond Law and Legal Definition

Savings bond is a non-negotiable government bond issued by the U.S. It is payable to a designated person, sometimes with an alternative payee. It cannot be bought and sold once the original purchase is made; therefore, there is no secondary market for savings bonds. The savings bonds are exempt from state and local taxes, but in the specific case of savings bonds, all federal taxes may be deferred until the bond is redeemed.