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.
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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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
The Treasury Department has announced that Series EE savings bonds issued on and after May 1, 2005, will earn fixed, instead of variable, rates of interest.
* Redeeming any Series EE savings bonds (also called Patriot bonds) on which you have elected to defer taxes until they are redeemed
A Sample Recommendation: Using Series EE Savings Bonds to Fund a 529 College Savings Plan
series EE savings bonds (interest is deferred until the bond is cashed in), and vacant Land expected to appreciate.
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.
Financial Snapshot: The Williamses HOUSEHOLD INCOME Gross Income $150,000 ASSETS Market value of home $260,000 Diane's 401(k) 49,000 Whitney's stocks 1,000 Market value of two cars 34,000 Checking account 2,000 Savings account 1,500 529 plan for children 600 Series EE savings bonds 5,000 Household furnishings 10,000 Total $363,100 LIABILITIES Mortgage $160,000 Car loans 28,000 Student loans 26,000 Credit cards 11,000 Private school tuition 13,000 Total $238,000 NET WORTH $125,100
These "Patriot Bonds," it turned out, were just regular Series EE savings bonds with a new label, and what revenue they raised was not even earmarked for the war on terrorism.
Series EE savings bonds bought on or after May 1, 1997, earn interest based on five-year Treasury security yields.
Like municipal bonds, series EE savings bonds are tax-advantaged, and investors earn lower yields compared with similar fully taxable investments.
Before RDS, series EE savings bonds purchased "over the counter" from an issuing agent, such as a commercial bank, were conveyed directly to the buyer at the time of purchase.
Series EE Savings Bonds. The interest they accumulate will not be taxed until your child is 14 years old.