U.S. savings bonds are saving certificates issued by the federal government in amounts starting at $25. The Series EE bonds are the fixed-interest savings bonds now being issued. They can be purchased at banks, through payroll savings plans or on the Treasury Direct website.
Savings Bond Denominations
Paper savings bonds are issued in denominations from $50 to $10,000. The cost of a bond is one-half of the face amount. For example, a $500 savings bond will cost $250 when purchased at the bank. The bonds accumulate interest to build value towards the face-value amount. Electronic savings bonds purchased through the Treasury Direct website have the same face amount and value, starting at $25 up to $5,000. Electronic EE bonds can be purchased in any amount, including cents.
Fixed Interest Rate
Series EE savings bonds that have been issued since May 2005 pay a fixed rate of interest until they mature or are redeemed. The U.S. Treasury changes the rate for new savings bonds every six months, on the first of May and November. Interest on savings bonds accrues every month and compounds every six months. The compounding means that the interest calculation will be based on the bond value plus the interest earned during the previous six-month period.
Series EE bonds cannot be redeemed for the first year after purchase. If a bond is redeemed in the first five years, a penalty is charged of the last three month's interest earnings. Savings bonds are guaranteed to at least double in value in 20 years. This means a paper bond will reach its face value by 20 years. EE bonds continue to accrue interest for 30 years.
Current EE Bond Values
The Treasury Direct website provides a savings bond calculator that will give the current redemption value of an EE savings bond. The calculator requires the denomination and issue date of the bond. The Treasury Direct website also offers the Savings Bond Wizard, a downloadable software tool that will keep track of all of your bonds on your computer and automatically update the values every month.
- Treasury Direct: EE Savings Bonds in Depth
- TreasuryDirect. "Timeline of U.S. Savings Bonds." Accessed March 23, 2020.
- Department of the Treasury. "Introduction to Savings Bonds." Accessed March 23, 2020.
- New York State. "Certain Basics of Municipal Bonds." Accessed March 23, 2020.
- TreasuryDirect. "Series EE Savings Bonds." Accessed March 23, 2020.
- Federal Register. "United States Savings Bonds, Series EE, HH and I." Accessed March 23, 2020.
- TreasuryDirect. "Convert Your Paper Savings Bonds Using SmartExchange." Accessed March 23, 2020.
- Securities and Exchange Commission. "Zero Coupon Bonds." Accessed March 23, 2020.
- TreasuryDirect. "May 2005 and Later (EE Bond Rates and Terms)." Accessed March 23, 2020.
- TreasuryDirect. "Comparing Series EE and Series I Savings Bonds." Accessed March 23, 2020.
- Department of the Treasury. "Interest Accrual Dates for Series E, Series EE, and Series I United States Savings Bonds, and Savings Notes," Pages 1-2. Accessed March 23, 2020.
- TreasuryDirect. "Cashing (Redeeming) EE and E Savings Bonds." Accessed March 23, 2020.
- TreasuryDirect. "Buying Series EE Savings Bonds." Accessed March 23, 2020.
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.