Savings Bonds

U.S. Savings Bonds are U.S. Treasury securities that are backed by the full faith and credit of the United States Government. U.S. Savings bonds accrue interest until they are cashed or reach maturity. There are two types of Savings Bonds:

Series EE Bond
The Series EE Bond, which is also referred to as a Patriot Bond, is the most common type of savings bond. These bonds can be purchased for one-half the face amount beginning with denominations of $50 and up to $10,000. Series EE bonds stop earning interest at 30 years.

Series EE bonds are free from State and local income taxes. Federal tax on interest earned can be deferred until you cash the bond or it reaches its 30-year maturity, whichever happens first. You can buy up to $15,000 ($30,000 face value) of Series EE bonds in your name each calendar year. Series EE bonds can be purchased as gifts, prizes, or for education savings or retirement savings.

Series HH Bond
Series HH Bonds are current income U.S. securities. HH bonds do not increase in value. When you purchase an HH bond, you pay the face amount for the bond and interest is paid each six months, providing you with "current income." The interest payments are automatically deposited into your checking or savings account.

Series HH bonds pay interest at a fixed rate set on the day you buy the bond. Interest rates are reset on the 10th anniversary of the HH bond's issue date. You cannot buy HH bonds for cash. You get them only in exchange for Series EE bonds or upon reinvestment of the proceeds of matured Series H bonds. HH bonds come in denominations beginning at $500 and up to $10,000. There is no limit on the amount of HH bonds you can own.

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