What are Series EE Bonds?

A series EE bond is a fixed-rate savings bond issued by the United States (US) Treasury Department which reaches its final maturity after 30 years. Bonds may be purchased in incremental denominations ranging from $25 US Dollars (USD) to $10,000 USD, and must be held for a period of a year before they can be redeemed. Since their face value is guaranteed by the US government, series EE bonds are regarded as having a low risk.

In order to buy series EE bonds, the purchaser must first have a Social Security number. Next, he or she must be either a US citizen, a resident of the US, or a civilian employee of the US government, regardless of place of residence. While minors are not permitted to own other types of securities, they may own series EE savings bonds. Savings bonds are not transferable from one person to another. Series EE bonds are available for purchase in both electronic and paper formats.

A paper series EE bond can be bought in specific denominations ranging from $50 USD to $10,000 USD; the purchase price is one-half its face value. For example, a buyer would pay $50 USD for a $100 USD bond. Sellers of paper bonds include banks and other financial institutions, as well as the payroll savings plans offered by many employers. Since paper bonds are dependent upon interest rates, full maturity and face value are only reached at 20 years. After 20 years, interest may continue to accrue until the bond reaches its final maturity at 30 years.

Electronic series EE bonds can be purchased for $25 USD or more in increments of one penny. For example, it is possible to purchase an electronic bond for $43.76 USD. Since the full face value is paid for electronic bonds, they mature immediately. Contact the US Treasury Department for more information on buying electronic bonds.

Series EE bonds must be held for at least 12 months before they can be redeemed. Upon redemption, the purchaser will receive the accrued interest plus the purchase price of the bond. Three months of accrued interest is lost if an EE bond is redeemed sooner than 5 years after its purchase.

Regulations pertaining to series EE bonds are subject to change. In addition, regulations that apply to EE bonds are dependent upon their purchase date. Complete information on which laws apply to series EE bonds, by date of purchase, is available from the US Treasury Department.