Series EE Savings Bonds provide a steady low-risk fixed rate of return. Savings bonds are backed by the U.S. Government and can be used towards education, retirement and gifts. Series EE Bonds purchased on or after May 1, 2005 earn a fixed rate of return. This will ensure you know the bonds value at all times. Series EE Bonds that were purchased between May 1997 and April 30, 2005 earn a variable rate of return based on the 5-year Treasury security yields.
Series EE Savings Bonds can be purchased electronically through the TreasuryDirect website. Paper EE Bonds are still available at most financial institutions or through employer sponsored payroll savings plans. There are a few key differences between electronic and paper bonds.
Electronic Bonds
- You can purchase a maximum of $5,000 in one calendar year.
- EE Bonds are purchased in amounts of $25 or more.
- Electronic bonds are issued electronically to your TreasuryDirect account.
- Sold at face value and is worth its full value when available for redemption.
Paper Bonds
- You can purchase a maximum of $5,000 in one calendar year.
- They are sold in denominations of $50, $75, $100, $200, $500, $1,000, $5,000 and $10,000
- You are issued paper certificates
- Sold at half their face value. You pay $25 for a $50 bond. The bond is not worth its face value until it has matured.
The interest earned on your savings bonds is subject to federal income tax, which can be deferred until redemption, final maturity, or other taxable disposition, whichever occurs first. Savings bonds are also subject to estate, inheritance, gift, or other excise taxes, whether federal or state.
