Series HH savings bond

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Series HH Savings Bond

In the United States, a formerly-issued savings bond, exempt from state and local taxes, with an interest rate fixed for 10 years. These bonds paid par upon maturity, which was 20 years after issue. They were non-transferable and must either have been held or redeemed. Very often, the interest rate dropped to 1.5% after 10 years, which rarely kept pace with inflation. Series HH bonds were discontinued in 2004. See also: Series H bond.

Series HH savings bond

A U.S. Treasury obligation issued in multiples of $500 that pays interest every six months. The security has a maturity of ten years but may be redeemed after being held six months. This security has not been as popular as the Series EE bond. Now it may be obtained only by swapping the Series EE at its maturity.
References in periodicals archive ?
Previously, an individual could, at maturity or before, exchange a Series E or EE bond for a Series HH bond (or Series H bond before 1980-but see Editor's Note, Q 7764) without recognizing the unreported interest, except that he must report the interest to the extent he receives cash in the exchange.
The HH bond series allowed investors to roll maturing proceeds from other bonds series into HH bonds and then earn taxable interest every six months on the HH Bonds.
Previously, an individual could, at maturity or before, exchange a Series E or EE bond for a Series HH bond (or Series H bond before 1980--but see Editor's Note, Q 1143) without recognizing the unreported interest, except that he must report the interest to the extent he receives cash in the exchange.
The interest can be deferred beyond the bond's maturity if exchanged for a Series HH bond.
In addition, the proceeds of a matured H bond may be re-invested in an HH bond, but any tax deferral applying to the H bond principal expires at the the time the H bond matures.
Bond holders will no longer be able to reinvest HH/H bonds or exchange EE/E bonds for HH bonds.
Under this option the EE bond interest was not reported until the HH bonds were redeemed or matured.
After conversion, they will receive semi-annual interest payments from the Series HH bonds, which must be included on their returns.
Series HH bonds are current-income securities that do not increase in value.
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 2011 series HH bonds are scheduled for negotiated sale the week of June 13.
When Series HH bonds are issued, the rate is fixed and can be reset every 10 years.