Copy of Comparison of Bonds

NameCorporation BondsState / Munipical BondsUS Series HUS Series EOther US Bonds
Intro
Also called "revenue bonds" because they're often obligations from a state/subdivion dependent for interest payments on receipts from a toll road, bridge, building lease.
Covers a wide variety of coupon rates and maturity dates. But they're all guaranteed in terms of interest and principal.
Interest (Yield)
Shorter term issues yieled less than longer term issues.
Varies with quality and maturity. Shorter maturity = lower return.
4.29% for first year, and then 5.1% for next 9 years
Series E bond interest is not paid out, but is added to their redemption value. They're sold at 75% of their face value and mature 5 years 10 months after purchase. Held to maturity this works out at 5%, compounded semi-annually. Redeemed earlier, the first year yield moves up from 4.01% to an average of 5.2% in the next 4 years.
In many cases, the yield is above than the oligated rate, an example is the transport department
Historic performance
Early 1972, those of highest quality (Moody's AAA corporate bond index) yielded 7.19% for a 25 year maturity. "Lower-medium" grade (BAA) return 8.23% for long maturities.
Late 1971, S&P's municipal bond index average AA, 20 years maturity, yielded 5.78%. Vineland, N.J bonds rated AA for A, yielded 3% on a 1 year maturity, rising to 1995 and 1996.
In late 1971, long term issues (10yrs+) showed an average yield of 6.09%, intermediate (3-5yrs) 6.35% and short term 6.03%.
Taxation
Both federal and state tax.
Free of federal income tax and in the state of their issue.
Interest from bonds is subject to Federal income tax (annually when interest accrues or when the bond is disposed of) but except from state income tax.
👈 Same
Could get some older issues at discounts, because accepted for estate taxes at the same value (1 tax dollar = 1 bond dollar).
Cashing out
Cash anytime, at cost.
Any time, at their current redemption value. Can exchange these for Series H, with some tax advantages.
Lost, destroyed, stolen?
Replaced without cost
👈 Same
Purchase limitations
Yes, but there are liberal provisions for co-ownership with family members. Essentially means you could probably buy as much as you can afford
👈 Same
Renewal/ extension
Right to extend bonds at maturity (means you continue to accumulate annual values and higher rates 😲)
Safety
Not all are safe! An AAA rating from Moody's or S&P means safe.
Very safe
Very safe
Very safe