Everything You Need to Know About EE Savings Bonds

Last Updated: March 5, 2019 | by Jackie Brahney | reviewed by Jack Quinn

EE Savings Bond

Series EE Savings Bonds can be a complicated investment or given as a gift. Find out how to manage this investment to ensure your highest possible return for cash-in values and interest rates.

What Are EE Savings Bonds?

Series EE Savings Bonds were offered by the U.S. Treasury on July 1, 1980, as a reliable, low-risk government-backed savings products that can be used toward savings, financing education, supplemental retirement income, birthday, graduation and other gifts.

  • EE Savings Bonds are a U.S. Treasury security.
  • Most EE Bonds earn interest for a total of 30 years.
  • EE Bonds issued since May 2005, will earn a fixed rate of interest, which is set at the time of issuance, for the first 20 years.
  • After the initial 20-year period, an additional 10-year extension and new rate (if applicable) will be initiated, for a total of 30 years of interest earnings.
  • EE Bonds issued May 1997-April 2005 earn a rate of interest that changes every six months (a variable rate).
  • EE Bonds issued prior to May 1997 earn interest at different rates depending on when they were bought (See below).
  • Series EE Savings Bonds replaced Series E Savings Bonds.
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What Do EE Bonds Cost?

  • Paper EE Bonds were purchased for half of their face value. Example, a bond $100 paper EE Bond cost $50. You can no longer purchase paper EE bonds as of December 31, 2011.
  • Electronic EE Bonds are purchased at face value.  Example an electronic $25 EE bond costs $25, and come in any amount to the penny for $25 or more. Example, you could buy a $100.62 electronic bond (which costs $100.62).  

What Interest Rates Are EE Bonds Earning?

  • Series EE Savings Bonds purchased between November 1, 2018-April 30, 2018 will earn .10%.
  • Older EE paper savings bonds earn interest based on the issue date (see below) which can vary greatly.  
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How Are EE Bond Interest Rates Calculated?

EE Bonds purchased on or after May 1, 2005, earn a fixed rate of return, which is set at time of purchase.

  • Interest is added to an EE bond monthly and paid when you cash the bond.
  • Interest is posted on the 1st of the month.
  • Interest is compounded semiannually.
  • EE Bonds purchased today increase in value every month rather than every six-month.
  • Rates are set every May 1st and November 1st, for NEW bonds issued, with each new rate effective for all bonds issued in the six month period following.
  • Twice a year, all the interest that a bond earned in the previous six months is added to the main value of the bond (also known as principal value). Interest in the next six months is then earned on the new established bond value. In the 7tth month, interest is earned on the original price, plus the six months of interest.
  • The Treasury sets the fixed rate for Series EE Savings Bonds based on several factors.
  • The interest rate is adjusted for features unique to savings bonds, such as the tax deferral feature and the option to redeem the savings bonds at any time after the initial holding period.
  • EE Bonds purchased today increase in value every month rather than every six-month.
  • See the chart above in the Maturity Rules section for your bond’s maturity information.

How Do I Buy EE Bonds?

  • Effective 1/1/2012 you can no longer purchase paper EE Bonds at banks, financial institution or credit unions.
  • Electronic EE Bonds must be purchased through a TreasuryDirect account via the Treasury Department.

See the current savings bond rates for bonds available for purchase.

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Who Can Own EE Bonds?

Individuals, corporations, associations, public or private organizations, and fiduciaries can own paper Series EE/E Bonds. You can own U.S. Savings Bonds if you have a Social Security Number and a:

  • Resident of the United States.
  • Citizen of the United States living abroad (must have U.S. address of record).
  • Civilian employee of the United States regardless of residence.
  • A trust, estate, corporation, partnership or other entity may own EE Bonds ONLY if they have an EIN or social security number.
  • Unlike other securities minors CAN own PAPER EE Bonds.
  • Minors can NOT PURCHASE Electronic EE Bonds (Parent or custodians can open a TreasuryDirect account for the minor, which must be linked to the adult’s TreasuryDirect account.)

What Is The Amount Of EE Bonds I Can Buy?

  • EE Bonds can be purchased in amounts of $25 or more to the penny (electronic only) up to $10,000.
  • Maximum amount of electronic EE Bonds purchased annually, per calendar year, for a social security number is $10,000.
  • Electronic Series EE Savings Bonds are purchased at face value. For example: A face value $100 electronic EE bond is purchased for $100.

Note: Paper EE bonds were offered in denominations of $50, $75, $100, $200, $500, $1,000 and $5,000.

What Are The Maturity Rules For EE Bonds?

EE Bonds have many different interest rules and maturities depending on the time period in which they were purchased. Please note the following for bonds issued in the respective periods:

Bonds issued before November 1982

These bonds, earning interest for up to 30 years, are earning interest at either guaranteed or at market-based rates, whichever produces the higher redemption value.

Bonds Issued Nov. 1982 Through February 1993

These bonds begin earning interest on a fixed graduated scale that starts at 4.16% at six months and increases during the first five years to reach a guaranteed minimum rate at five years. Bonds with issue dates of November 1986 through February 1993 have a guaranteed minimum rate of 6% per year, compounded semiannually, for their 12-year original maturity period. Bonds with issue dates of November 1982 through October 1986 have a guaranteed minimum rate of 7.5% per year, compounded semiannually, for their 10-year original maturity period. These bonds are eligible for market-based rates once they’re held for five years.

Bonds Issued March 1993 through April 1995

Bonds with issue dates of March 1993 through April 1995 have a guaranteed minimum rate of 4% per year, compounded semiannually. These bonds have an original maturity period of 18 years. Once they’ve been held for five years, they become eligible for market-based rates.

Bonds Bought May 1995 Through April 1997

Series EE Savings Bonds issued May 1, 1995 through April 30, 1997, earn interest based on market yields for Treasury securities. Each May 1 and November 1, Treasury announces two Savings Bond rates. The Short-Term Rate is applied to bonds for the first five years they are held. The Long-Term Rate is applied to bonds from five years through 17 years. Bonds will continue to earn interest from 17 years through 30 years at the rates then in effect.

Bonds Bought May 1997 Through April 2005

Bonds bought May 1997 through April 2005 will earn interest based on 5-year Treasury security yields right from the start. The new rate for EE bonds will be 90% of the average yields on 5-year Treasury securities for the preceding six months; will increase in value every month instead of every six months. Interest is compounded semiannually. These bonds earn interest for 30 years.

Bonds Bought May 2005 and After (**ACTIVE**)

Series EE Savings Bonds issue dated on or after May 1, 2005 will earn a fixed rate of interest for 20 years, at which time the bond should have reached it’s face value. If the bond has not reached it’s face value, the Treasury will make a one time adjustment up to the face value. These EE bonds will increase in value every month instead of every six months. Interest is compounded semiannually. After the initial 20 yr period and additional 10 year extension and rate update will be initiated, for a total of 30 years of interest earning.

All EE Savings Bonds post their final maturity interest on the first day of the final maturity month.

The Treasury Department guarantees that new issues of Series EE Savings Bonds will double in value by 20 years from the issue date. This is referred to as the original maturity date. The following chart shows the original term for Series EE Savings Bonds:

Issue Date Original Term
01/80 – 10/8011 years
11/80 – 04/819 years
05/81 – 10/828 years
11/82 – 10/8610 years
11/86 – 02/9312 years
03/93 – 04/9518 years
05/95 – 05/0317 years
06/03 – present20 years

How Do I Cash In EE Bonds?

  • You can usually cash-in EE Bonds at a participating local bank. Call first, as some banks do not handle Savings Bond redemptions.
  • Some banks may limit the amount of daily redemptions and/or require that you have an account with them.
  • EE Bonds can be mailed into the Treasury Department and they will provide you with cash.
  • EE Bonds must be held for at least 1 year old before they are eligible for redemption.
  • During times of a federal disaster declaration, most Savings Bonds can be cashed-in before 1 year.
  • A 3-month penalty will apply if redeeming before the EE Bond is five years old. For example, if you buy a bond and redeem it 24 months later, you’ll get back your original investment and 21 months of interest.
  • The value of the bonds would be based on the announced rates applied over the initial 21-month period.

How Much Are EE Savings Bonds Worth?

EE Bond cash in values vary depending on when the bond was issued, based on the interest rates, rules and maturity dates that were in effect at the time of issuance.

Need to know the cash-in value of a Series EE bond, then use one of our two services. Use the free Savings Bond Calculator to determine your EE savings bond’s value, interest rate, maturity date and to see if now is the best time to cash in to avoid losing interest. Enter an unlimited number of savings bonds. Then save them in an online portfolio to receive a monthly statement about your EE Bonds values.

MAKE SURE YOU KNOW WHAT YOUR BONDS ARE WORTH BEFORE CASHING IN.

Our online calculator and portfolio services have saved bond owners hundreds of dollars at redemption because the bank calculated the wrong value for their bonds. Use our Savings Bond Calculator to find out exactly what your bonds are worth before you cash any in.

EE Bond Tax Rules and Advantages

  • Series EE Bond interest earnings are reportable for federal income tax purposes for the year in which the bonds are redeemed.
  • Bond owner can elect to report interest each year as it accrues; however, such an election must apply to all of the owner’s accrual-type securities (you must request to discontinue annual reporting to the Treasury).
  • IRS Publication 550 states if a Series EE Savings Bond has come to final maturity, the interest earned by that bond should be reported in the year it came to final maturity.
  • When possible, a Federal Income Tax Return should be amended, within the 3-year statute of limitations on amendments, to report such interest.
  • Twice a year, all the interest that the bond earned in the previous six months is added to the main (principal) value of the bond. Interest in the next six months is then earned on the new value. In month 7, you earn interest on the original price + six months of interest.

If this cannot be done, the bond should be cashed in and the interest reported for the year it is cashed.

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Tax-Free EE Bonds Used For Education

EE Bond owners (or co-owners) may be able to exclude from their income (for federal income tax purposes) all or part of the interest earnings received on the redemption of qualified Savings Bonds (including Series EE and I Savings Bonds) during the year, if that owner or co-owner has paid qualified higher education expenses during the same year. At least seven criteria and conditions must be met. Specific income limitations also apply. This exclusion is known as the “Education Savings Bond Program.” Only EE and I Bonds issued after 1989 apply. Consult with a tax advisor or financial professional to determine if you are eligible for the Education Savings Bond Program.

Note: When purchasing EE Bonds, you do NOT  have to designate them for use as Education Bonds.

Read more about Savings Bonds for Educational Purposes on our Tax-Free Savings Bonds for Education page.

EE To Series H/HH Bond Exchanges

  • EE Bonds exchanged for H or HH Savings Bonds are no longer issued.
  • On August 31, 2004, the government discontinued the exchange of EE Bond to HH/H Savings Bonds.
  • Current holders of HH/H Bonds need not do anything until their H or HH Bonds mature.

Created on: January 13, 2012

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Jackie Brahney

Marketing & Editorial Director at SavingsBonds.com
Jackie Brahney is the Marketing and Editorial Director and most notably, an U.S. Savings Bond Expert for SavingsBonds.com. Since 1991, she has done extensive research on savings bonds and state of the art savings bond valuation systems, and heads the company's public relations and marketing initiatives.
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