Savings Bonds
Savings bonds are a unique security as safe and secure as the U.S. Treasury. You are paid the principal and interest due you when you cash your bond. Your bonds can be replaced if lost, stolen or destroyed. Your bonds are sent to you as you pay for them.
Monthly Interest
Series EE bonds will increase in value every month. The announced interest rate is compounded semiannually. Series EE bonds can earn interest for 30 years. The 5.59 percent Series EE savings bond rate is in effect for bonds issued on or after May 1, 1997, that are purchased or enter semiannual earnings periods from November 1997 through April 1998. A new interest rate is announced effective each May 1 and November 1. A 3-month interest penalty is applied to these bonds if redeemed before five years.
Series EE Bonds Issued Before May 1997
The 4.53 percent Short-Term Series EE savings bond rate is in effect for bonds issued from May 1995 through April 1997 for bonds that enter semiannual earnings periods from November 1997 through April 1998.
Tax Advantage
Interest earned on your Series EE bonds is exempt from State and local income taxes. You can defer Federal income tax until you redeem the bonds or they stop earning interest after 30 years. There are also special tax benefits available for education savings.
Face Value/Denomination
Series EE Bonds are sold at half their face value and are available in denominations ranging from $100.00 through $1,000.00. The denomination of the bond to be purchased may be authorized only in accordance with one of the options shown in the Deduction Amounts Table below.
| Denomination Amount |
Purchase Price |
Deduction Amount |
Pay Periods |
|---|---|---|---|
| $ 100.00 | $ 50.00 | $ 12.50 | 4 |
| $ 100.00 | $ 50.00 | $ 25.00 | 2 |
| $ 100.00 | $ 50.00 | $ 50.00 | 1 |
| $ 200.00 | $ 100.00 | $ 25.00 | 4 |
| $ 200.00 | $ 100.00 | $ 50.00 | 2 |
| $ 200.00 | $ 100.00 | $ 100.00 | 1 |
| $ 500.00 | $ 250.00 | $50.00 | 5 |
| $ 500.00 | $ 250.00 | $ 250.00 | 1 |
| $ 1,000.00 | $ 500.00 | $ 100.00 | 5 |
| $ 1,000.00 | $ 500.00 | $ 500.00 | 1 |
Liquidity
You can cash Series EE bonds any time after 6 months. Of course, if a bond is redeemed before five years, a 3-month interest penalty applies.
To Enroll
You must complete form STD. 242 (United States Savings Bonds Purchase/Payroll Deduction Authorization), available at the Benefits Service Department, Brotman Hall 358.
There is a limit of four bond accounts per employee and they cannot be identical.
Issuance of Bonds
Bonds will be issued and mailed to the registered owner by the Federal Reserve Bank. Bonds will be dated as of the month and year for which the deductions were withheld and will be mailed approximately 60 days after that date.
The latest United States Savings Bonds/Notes Earnings Report and other useful information about savings bonds is available at the US Bureau of the Public Debt or savingsbonds.gov.