A debt security which is issued to savers by a government for the purpose of collecting money that will be used to finance wars or military actions. The rate of return on such cause- or purpose-oriented securities is typically lower than prevailing market rates. In other words, the government borrows from citizens willing to fund their army’s operations at rates favorable to the government in a gesture of contribution and participation.

Nations issue at times of war a variety of bonds and fiscal or revenue stamps to finance military efforts. After the war, the bond could be redeemed for its original price plus interest. For example, in the First World War (WWI), the United States issued “Liberty Bonds” to support the allied forces in WWI. People subscribing to these bonds were seen as patriotic and true citizens. Liberty Bonds from WWI do not continue to earn interest. The redemption value is usually the face value of the bond plus any unused coupons attached to the bond. In the United States, the last official war bond was the Series E Bond issued during the Second World War (WWII). At the time, these bonds were called defense bonds, but that name was changed to war bonds after the Japanese attack on Pearl Harbor on Dec 7, 1941.

War bonds are available in a wide range of denominations to accommodate for all types of holders in terms of their ability to contribute. To that end, small stamps targeted low-income individuals, while very-large denominations were sold to high-net-worth individuals.