Series EE savings bond

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Series EE Savings Bond

In the United States, a savings bond, exempt from state and local taxes, with a fixed interest rate. The interest is adjusted every six months and is equal to 90% of the average 5-year Treasury security yield over the six months preceding the calculation. These bonds are sold at half of face value and pay par upon maturity, which is 30 years after purchase. They must be held for at least one year, and United States Treasury guarantees that it will double in value after 20 years. They are non-transferable and must either be held or redeemed. When used to pay for college education, they are exempt from federal taxes. Series EE bonds are the successors to Series E bonds, better known as war bonds.

Series EE savings bond

A U.S. Treasury obligation that pays a variable interest rate and is sold to investors in denominations as low as $50 at a 50% discount from face value. Series EE bonds earn interest at 90% of the average yield on five-year Treasury securities for the previous six months. Bonds may be redeemed after six months early, but a three-month interest penalty is assessed for redemptions during the first five years. Federal income taxes on interest earned may be paid each year or may be deferred until the savings bond is redeemed. Interest earned on savings bonds is exempt from state and local taxation. See also Patriot Bond.
References in periodicals archive ?
We cashed out most of the Series EE bonds we had saved during the previous seven years--a thrilling $10,000
Bond interest - For 2009, interest on proceeds of qualified savings bonds (specifically, Series I bonds or qualified Series EE bonds issued after 1989) cashed to pay education expenses is tax free for joint filers with less than $104,900 in AGI, partially tax free for AGI of $104,900-$134,900; comparable limits for single filers are $69,950-$84,950.
They found that Series EE bonds yielded higher returns than T-bills with less volatility.
Savings Bonds are no longer being issued, and that Series EE savings bonds issued on or after May 1, 2005, earn fixed interest rates, clients who invest in EE bonds should understand that the new rate policy increases interest rate risk.
Treasury series EE bonds and I bonds to help clients make savings bonds a part of their investment strategy.
For example, if a decedent has $20,000 of untaxed accrued interest on Series E and EE bonds and no other taxable income at death, the total income tax and estate tax savings from including the untaxed accrued interest on the final return would be approximately $5,504 (see Exhibit 1).
The traditional Series EE bonds, which sell for half their face value, will be available in denominations ranging from $50 to $500.
In addition to the inflation protection, I-bonds differ in another important respect from EE bonds.
Treasury's savings bond offerings today consist of series EE bonds, the interest earnings on which accrue until the bond matures or is redeemed, and series HH bonds, which are obtained in exchange for series E or series EE bonds and pay interest twice per year, via ACH, to the owner's designated depository institution.
The fiscal 2012 series EE bonds are scheduled for negotiated sale on March 6.