EE Savings Bonds
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 (www.treasurydirect.gov).
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.
The U.S. Treasury guarantees that, at a minimum, an EE Bond will double its value after 20 years and will continue to earn the fixed rate unless a new rate or rate structure is announced. If a bond does not double in value as the result of applying the fixed rate for 20 years, the U.S. Treasury will make a one-time adjustment after 20 years to make up the difference. Series EE bonds continue to earn interest for 30 years; after 30 years no interest is earned. All bonds are non-transferable. Only the owner of the bond can cash it. Bonds that are bought as gifts must be registered in the recipient's name, not the buyer's name.
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