Series EE bonds are savings certificates issued by the United States Treasury. Once an EE bond is 12 months old, it can be redeemed for cash.
Types
Paper series EE bonds are purchased for half their face value. Bonds come in face values of $50, $75, $100, $200, $500, $1,000, $5,000 and $10,000. A $100 bond would have an initial value of $50.
Function
New series EE bonds accrue interest for up to 30 years. Bonds issued before May 1, 2005, earn an adjustable rate reset each year by the Treasury. Bonds issued after that date earn a fixed rate for 20 years.
Redemptions
Series EE bonds can be redeemed one year after issue. If they are redeemed in the first five years, three months of interest will be lost. Paper EE bonds can be purchased and redeemed at any bank branch.
Bond values
Paper series EE bonds are initially worth half of the face value of the bond. In subsequent years, bonds are worth the purchase price plus earned interest, which accrues monthly. Calculate the current value of any EE bond using the Treasury Direct link in Resources.
Considerations
Series EE bonds are not transferable and only the original owner can redeem them. You cannot cash in a bond that belongs to someone else.
References
- Treasury Direct on EE bonds
- U.S. Treasury Department. "Treasury to End Over-the-Counter Sales of Paper U.S. Savings Bonds; Action Will Save $70 Million Over First Five Years." Accessed April 7, 2020.
- U.S. Treasury Department. "Beginnings of the Savings Bond Program." Accessed April 8, 2020.
- U.S. Treasury Department. "Fiscal Service Announces New Savings Bonds Rates Series I to Earn 2.22%, Series EE to Earn 0.10%." Accessed April 8, 2020.
- U.S. Treasury Department. "Brief History of the Savings Bonds Program." Accessed April 8, 2020.
- U.S. Treasury Department. "Buying Series EE Savings Bonds." Accessed April 8, 2020.
- U.S. Treasury Department. "Questions and Answers For Series EE Savings Bonds Issued May 2005 and Thereafter." Accessed April 8, 2020.
- U.S. Treasury Department. "Series EE Savings Bonds To Earn Fixed Rates Beginning With May 2005 Issues." Accessed April 8, 2020.
- U.S. Treasury Department. "May 1997 through April 2005 (EE Bond Rates and Terms)." Accessed April 8, 2020.
- U.S. Treasury Department. "Using Your Income Tax Refund to Buy Paper Savings Bonds." Accessed April 8, 2020.
- U.S. Treasury Department. "Education Planning." Accessed April 8, 2020.
Writer Bio
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.