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assuring them a real rate of return over and above inflation. I Bonds have features that make them attractive to many investors. They are sold at face value in denominations of $50, $75, $100, $200, $500, $1,000, $5,000 and $10,000 and earn interest for as long as 30 years. I Bond earnings are added every month and interest is compounded semiannually. They are exempt from state and local income tax, and federal income tax on I Bond earnings can be deferred until the bonds are cashed or stop earning interest after 30 years. Investors cashing I Bonds before five years are subject to a three-month earnings penalty.
The Series EE Savings Bond: Series EE savings bonds are safe, low-risk savings products that have paid interest based on current market rates for up to 30 years for bonds purchased May 1997 through April 30, 2005. Since May 2005, Series EE bonds earn a fixed rate of return.
You may purchase EE Bonds through the U.S. Department of the Treasury’s Treasury Direct website or at almost any financial institution or through your employer’s payroll deduction plan, if available.
The Series EE bond replaced the E bond, which is the one most associated with World War II war bonds. The first Series E Bond was sold to President Franklin D. Roosevelt by Secretary of the Treasury, Henry Morgenthau, on May 1, 1941.
For more information about how to buy I Bond and Series EE savings bonds, visit the Treasury Direct website at www.treasurydirect.gov.
Savings Accounts 35