EE Savings Bonds

by Cara Scatizzi

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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.

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