Terms of Use 

The U.S. Treasury Department began a new policy for Series EE Savings Bonds issued on or after May 1, 2005.  Series EE Savings Bonds now earn fixed rates of interest. The fixed rate will apply for the 30-year life of each bond (instead of fluctuating every six months).  Series EE Savings Bonds issued prior to May 1, 2005 will continue to earn interest under the terms in effect when they were issued.

Rates for new issues are adjusted each May 1 and November 1, with each new rate effective for all Series EE Savings Bonds issued through the following six months. Interest accrues monthly and is compounded semiannually. Series EE Savings Bonds must be held a minimum of one year, and there is a three-month interest penalty applied to bonds held less than five years from issue date.

The Treasury guarantees that Series EE Savings Bonds will at least double in 20 years, its original maturity, and it will continue to earn the fixed rate set at the time of issue 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 Treasury will make a one-time adjustment at original maturity to make up the difference.

Savings bonds are available in electronic or paper form. Paper EE bonds are issued at a 50 percent discount from face value, and electronic EE bonds are issued at face value. Issue prices for EE bonds start at $25. Electronic savings bonds can be purchased directly from the Treasury Department by opening a TreasuryDirect online account at www.treasurydirect.gov. Paper savings bonds can be purchased either through a financial institution or through payroll savings plans offered by thousands of employers.

If you like the idea of investing in U.S. Government Bonds, Series I Bonds are an alternative to Series EE Savings Bonds. Series I Bonds are sold at face value, earn higher rates of interest than Series EE, and have tax advantages when earnings are exempt from state and local income tax.  Federal income tax can be deferred for up to 30 years or until you redeem the bonds. 

You can purchase Series I savings bonds at www.treasurydirect.gov, through most financial institutions, or through employer-sponsored payroll savings plans.