The Series EE Bond (often referred to as a "Patriot Bond") is a non-marketable, interest-bearing U.S. government savings bond. These bonds are guaranteed to at least double in value over the typical 20-year initial term. Some Series EE bonds have total interest-paying lives that extend beyond the original maturity date, up to 30 years from issuance. Coupon rates for Series EE Bonds are determined at the time of issuance and are based on the percentage of the long-term Treasury rates.
Key Takeaways
Series EE Bonds are interest-bearing U.S. government savings bonds guaranteed to at least double in value over their typical 20-year initial terms.
Some Series EE bonds pay interest beyond the original maturity date, up to 30 years from issuance.
There is a $25 minimum investment requirement for EE bonds.
Every investor may purchase up to $10,000 in these bonds each calendar year.
Series EE bonds issued after May 2005 are assigned semi-annual fixed coupon rates on May 1 and November 1. The rates apply to all issuances for the ensuing six months. Bonds issued after each date increase in value monthly, but interest payments are handed out semiannually.
Series EE bonds are considered ultra-safe, low-risk investments, whose interest is typically exempt from state and local taxes. However, they are subject to federal taxes, but only in the year in which the bond matures or is redeemed. EE Bonds may be purchased by U.S. citizens, official U.S. residents, minors, and all U.S. government employees—regardless of their citizenship status.
Special Considerations
Paper EE bonds were re-issued as "Patriot Bonds" after the Sept. 11, 2001, terrorist attacks. They are identical in every way to the paper Series EE Bonds except that any paper bonds purchased through a financial institution after Dec. 10, 2001, have the words "Patriot Bond" printed on the top half of the bond certificate, situated between the Social Security Number (SSN) and the issue date. Financial institutions no longer issue Series EE bonds in paper form, but the paper Patriot Bonds can still be cashed or converted into electronic bonds.
Series EE bonds don't need to be reissued to correct small typographical errors in names, addresses, or Social Security numbers.
Requirements for a Series EE Bond
There is a $25 minimum investment requirement for EE bonds, and each investor may purchase up to $10,000 in these bonds each calendar year. Furthermore, bondholders must hold onto these investments for at least twelve months, before they can redeem the bonds. Those who redeem bonds within five years will be docked three months of accrued interest payments. Since EE bonds earn interest for up to 30 years, the longer they're held, the more they're worth.
Paper bondswere issued at a 50% discount to par, while bonds electronically sourced through TreasuryDirect are purchased at face value. The latter is still guaranteed to be worth twice their original value at first maturity date after 20 years while paying interest the same way as paper EE bonds.
We sell Treasury Bonds for a term of either 20 or 30 years. Bonds pay a fixed rate of interest every six months until they mature. You can hold a bond until it matures or sell it before it matures. EE Bonds, I Bonds, and HH Bonds are U.S. savings bonds.
are a low-risk way to save money. They earn interest regularly for 30 years (or until you cash them if you do that before 30 years). For EE bonds
EE bonds
EE bonds earn a fixed rate of interest, but, regardless of the rate, they are guaranteed to double in value if you hold them 20 years. Series I bonds earn a variable rate of interest that is tied to inflation. As inflation occurs, the bonds' values go up.
At 20 years, the government ensures that you will be paid double the face value of the bond. Although they technically mature after 20 years, these bonds actually don't expire for 30 years. You'll keep earning interest for an extra decade.
Series EE bonds mature in 20 years but earn interest for up to 30 years. The U.S. Treasury guarantees Series EE bonds will double in value in 20 years.
The government guarantees they will double in value in 20 years, even if it must add money to your account to make that happen. When do Series EE savings bonds mature? Series EE savings bonds issued since May 2005 mature in 20 years, at which time they will have doubled in value.
According to the Treasury Department, it's typical to defer reporting interest until you redeem bonds at maturity. With electronic Series EE bonds, the redemption process is automatic and interest is reported to the IRS. Interest earnings on bonds are reported on IRS Form 1099-INT.
At the maturity date of a bond, the principal investment is repaid to the investor, while the regular interest payments that were made out during the life of the bond, stop rolling in. Investors can redeem the accumulated interest and their capital without penalty.
While the Treasury will not penalize you for holding a U.S. Savings Bond past its date of maturity, the Internal Revenue Service will. Interest accumulated over the life of a U.S. Savings Bond must be reported on your 1040 form for the tax year in which you redeem the bond or it reaches final maturity.
Where do I cash in a savings bond? You can cash paper bonds at a bank or through the U.S. Department of the Treasury's TreasuryDirect website. Not all banks offer the service, and many only provide it if you are an account holder, according to a NerdWallet analysis of the 20 largest U.S. banks.
You can report the interest each year you earn it or when you cash the bond. You will report it on Schedule B of your 1040. You can avoid these taxes by using the money for qualified higher education expenses.
You can get your cash for an EE or I savings bond any time after you have owned it for 1 year. However, the longer you hold the bond, the more it earns for you (for up to 30 years for an EE or I bond). Also, if you cash in the bond in less than 5 years, you lose the last 3 months of interest.
EE bonds you buy now have a fixed interest rate that you know when you buy the bond. That rate remains the same for at least the first 20 years. It may change after that for the last 10 of its 30 years. We guarantee that the value of your new EE bond at 20 years will be double what you paid for it.
After 20 years, the Patriot Bond is guaranteed to be worth at least face value. So a $50 Patriot Bond, which was bought for $25, will be worth at least $50 after 20 years. It can continue to accrue interest for as many as 10 more years after that.
You can get your cash for an EE or I savings bond any time after you have owned it for 1 year. However, the longer you hold the bond, the more it earns for you (for up to 30 years for an EE or I bond). Also, if you cash in the bond in less than 5 years, you lose the last 3 months of interest.
Introduction: My name is Greg Kuvalis, I am a witty, spotless, beautiful, charming, delightful, thankful, beautiful person who loves writing and wants to share my knowledge and understanding with you.
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