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Interest is earned over 30 years. You do not have to report the interest income until you cash in the bond or it reached its final maturity, whichever comes first. When you do the interest is subject to federal income tax but exempt from state and local tax.
You cannot cash the bond in until 6 months of ownership. If you cash it in after you have owned it for less than five years you will forfeit 3 months of interest.
The Bureau of the Public Debt announced today that as of January 1, 2012, paper savings bonds will no longer be sold at financial institutions.
This action, which supports the U.S. Department of the Treasury's goal to increase the number of electronic transactions with citizens and businesses, will save American taxpayers approximately $70 million over the first five years. But savings bonds, introduced in 1935, are not going away. Electronic savings bonds in Series EE and I will remain available through purchase in TreasuryDirect®, a secure, web-based system operated by Public Debt – where investors have been purchasing savings bonds, available 24/7, since 2002.

Derivative instruments are financial contracts whose value is based on an underlying security, a currency exchange rate, an interest rate or a market index. Many types of instruments representing a wide range of potential risks and rewards are derivatives, including futures contracts, options on futures contracts, and forward currency contracts.

American Depositary Receipts ( ADRs ) are U.S. dollar denominated receipts representing shares of foreign based corporations. ADR's are issued by U.S. banks or trust companies and entitle the holder to all dividends and capital gains that are paid out of underlying foreign assets.

Equity securities include common stocks, preferred stocks, securities convertible into common stocks, and rights and warrants to subscribe for the purchase of common stocks. Equity securities may be listed on a stock exchange or NASDAQ National Market System or unlisted. Warrants are rights to purchase securities at a specified time at a specified price.

Equity securities include common stocks, preferred stocks, securities convertible into common stocks, and rights and warrants to subscribe for the purchase of common stocks. Equity securities may be listed on a stock exchange or NASDAQ National Market System or unlisted.
Warrants are rights to purchase securities at a specified time at a specified price.

Fixed income securities are securities that pay interest at set times at either fixed, floating or variable rates, or which are issued at a discount to their principal amount instead of making periodic interest payments. Fixed income securities include corporate bonds, debentures and other similar corporate debt instruments, zero coupon bonds and variable master demand notes.

Convertible securities are bonds or preferred stocks that may be converted (exchanged) into common stock of the issuing company within a specified time period for a specified number of shares.
Convertible securities offer a Mutual Fund a way to participate in the capital appreciation of the common stock into which the securities are convertable, while earning higher current income than is available from the common stock.

Money market instruments are high quality short term instruments including commercial paper, bankers' acceptance and negotiable certificates of deposit of banks or savings and loan associations, short term corporate obligations and short term US government obligations.

Interest rate risk is an increase in prevailing interest rates will cause fixed income securities held by a Mutual fund to decline in value. Longer term bonds are generally more sensitive to interest rate changes than shorter term bonds. Generally, the longer the average maturity of the bonds held by a mutual fund, the more the fund's share price will fluctuate in response to interest rate changes.

Foreign securities risk occurs because foreign securities are generally more volatile and less liquid than U.S. securities in part because of greater political and economic risks and less public information available about the foreign countries.
Issuers of foreign securities are generally not subject to the same degree of regulation as are the U.S. issuers.
The reporting and accounting and auditing standard of foreign countries may differ significantly from U.S. standards.