Series EE bonds are savings certificates issued by the U.S. Treasury. You can purchase them at banks, through payroll savings plans and directly from the Treasury at the Treasury Direct website. The value of a Series EE bond is based on the original face amount and the date the bond was purchased.
Paper Series EE bonds are issued in face amounts of $50, $75, $100, $100, $200, $500, $1,000, $5,000 and $10,000. The cost of a paper EE savings bond is one-half the face amount. Electronic EE bonds are purchased through the Treasury direct website and the face amount is equal to the purchase price. You can purchase electronic bonds in any amount of $25 or greater. The rate of interest earned on an EE bond is fixed until the bond is redeemed. Paper EE bonds are guaranteed to double in value or reach the face amount in 20 years or less.
You can find the value of any Series EE savings bond on the Treasury Direct website. The Savings Bond Calculator information from the website is linked below. Click on the "Get Started" link to go directly to the calculator. You will need the face value of the bond, the serial number and the issue date. The calculator will provide the current redemption value. If you own a number of bonds or are on a regular purchase program, the Treasury Direct website has the downloadable Savings Bond Wizard software. You can load the data of all of your bonds into the software, and it will calculate and update the current value. It will also add in future bond purchases if you are on payroll purchase program.
Series EE savings bonds earn no interest if they are redeemed within one year of the purchase date. Bonds redeemed in the first five years are charged a three-month interest penalty. The online bond calculator will include these factors and give a redemption value with the penalties included. Bonds issued after May 2005 earn the same rate of interest until they are redeemed. The rate for new bonds is set every May and November and is based on the current 10-year Treasury note rate. Bonds issued prior to May 2005 have adjustable interest rates. The rate on older bonds is changed twice a year based on current market interest rates.
The interest earned on Series EE savings bonds is exempt from state and local taxes. They also grow tax deferred for federal income taxes. No taxes are owned on savings bond interest until the bond is redeemed. Savings bonds continue to earn interest until 30 years after the issue date.
Savings bonds are issued to a specific individual and are not transferable. The owner can redeem bonds at any bank with proper identification. In person redemptions are limited to $1,000. If a savings bond owner wants to redeem a larger amount, the bonds must be signature-guaranteed at a bank and mailed to the Treasury. The Treasury will issue a government check for the proceeds.
Tim Plaehn has been writing financial, investment and trading articles and blogs since 2007. His work has appeared online at Seeking Alpha, Marketwatch.com and various other websites. Plaehn has a bachelor's degree in mathematics from the U.S. Air Force Academy.