EE Savings Bonds

EE Savings Bonds Splash image
EE Savings Bonds are low-risk, U.S. government-backed securities. EE bonds purchased on or after May 1, 2005, earn a fixed rate of return (determined by the issue date), while EE bonds purchased prior to May 1, 2005, have rates based on five-year Treasury security yields and earn a variable market-based rate of return. These savings bonds are also exempt from state and local taxes. If the bonds are used for paying college expenses, they are exempt from federal taxes as well.

How It Works

EE Savings Bonds are guaranteed by the United States government. Rates for newly issued bonds are adjusted each May 1 and November 1, with each new rate effective for all bonds issued in the six months following the adjustment. The bonds increase in value every month (as opposed to every six months like older bonds) and interest is compounded semiannually. Rates for EE bonds are posted on the TreasuryDirect Web site (

EE Bonds can be redeemed one year after purchase; however, if you redeem EE Bonds in the first five years, you will forfeit the three most recent months' interest. So if you owned a bond for 24 months, you will receive the original investment plus 21 months of interest.

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