2. Series H and HH
- Series H (current income bonds)- were first offered on June 1 1952 through December 1979 when they were replaced by Series HH bonds on January 1, 1980. Mature thirty years from issue date and were issued only in registered form. They were purchased at face value for cash. The available denominations were $500, $1,000, $5,000, and $10,000. Interest was paid semi-annually and the rate was fixed. Bonds were eligible for redemption six month after issue at certain banks of the Federal Reserve.
Series HH - these bonds were introduced in January, 1980 to replace Series H issues. They may not be purchased with cash, but may be obtained either by exchanging Series E/EE bonds and savings notes at least six months old or by exchanging Series H bonds. They were sold at par, have a maturity of twenty years and are available in the following denominations: $500, $1,000, $5,000, and $10,000. August 31st, 2004 was the last issue date for HH/H Bonds. After August 31, 2004, the government discontinued the exchange of bonds for HH/H bonds. Current holders of HH/H Bonds will not need to do anything different than they normally would have. Interest on Series HH bonds issued on or after October 1, 1989, is paid electronically through the Automated Clearinghouse (ACH) to the registered owner or co-owner's account at a financial institution. For HH bonds issued before October 1, 1989, interest may be paid through ACH or by check. HH Bonds pay interest at a fixed rate, which is determined on the day you purchased your bond for the first 10 years. After this period, these bonds automatically enter into a ten year extension and will assume a new guaranteed rate. The greatest advantage of the HH bond is that the interest income from E, EE and SN/FS can be deferred for up to twenty additional years. The interest that was rolled over from the E, EE, or SN/FS MUST be reported when the HH bond is cashed in, or reaches final maturity, whichever occurs first. (NOTE: You can report the interest income for the E, EE and SN/FS when you exchange to HH bonds). Interest income on series HH bonds is not eligible for exclusion when used for qualified tuition expenses.
3. Series I
- Series I bonds- were first issued by the United State Treasury on September 1, 1998 to offer the opportunity to save and protect the bonds' purchasing power. Issued at face value, the bonds are available in denominations of $50, $75, $100, $200, $500, $1,000, $5,000 and $10,000. Interest is calculated monthly and compounded semi-annually for thirty years (an original maturity of twenty years with an automatic ten year extension). They are issued on registered form only and are not transferable. You can purchase up to $30,000 worth of I Bonds annually (each calendar year). (NOTE: You can purchase up to $30,000 in EE Bonds as well, totaling $60,000 max annually.) The rate is structured as follows. There is a fixed rate of return that the United States Treasury announces each May and November. This rate applies to all bonds issued during the six month period starting with the effective date of the announcement, either May 1 or November 1. This fixed rate remains the same for the life of the bond. Additionally, every May and November, the Treasury announces a semi-annual inflation rate based on the Consumer Price Index for all urban consumers (CPI-U). The inflation rate is a measure of inflation for the six months prior to the announcement (e.g. for May, it would be inflation from the prior October through March). The Department of Labor's Bureau of Labor Statistics publishes the CPI-U monthly. The semi-annual inflation rate is added to the bond's fixed rate to determine the bond's earnings rate for the following six months. The interest income exclusion for higher education costs is available for Series I bonds.