Series EE Bond

AAA

DEFINITION of 'Series EE Bond'

A non-marketable, interest-bearing U.S. government savings bond that is guaranteed to at least double in value over the initial term of the bond, typically 20 years. Most Series EE bonds have a total interest-paying life that extends beyond the original maturity date, up to 30 years from issuance.

INVESTOPEDIA EXPLAINS 'Series EE Bond'

Series EE bonds issued after May 2005 are assigned a fixed coupon rate; rates are set twice per year in May and in November and apply to all issuances for the ensuing six months. Bonds issued after this date increase in value monthly, but interest payments are semiannual.

Paper EE bonds are issued at a 50% discount to par, while bonds purchased electronically (through TreasuryDirect) are purchased at face value; the latter are still guaranteed to be worth twice their original value at first maturity date after 20 years, and pay interest the same way as paper EE bonds.

Series EE bonds are considered ultra-safe, low-risk investments. Interest on Series EE bonds is typically exempt from state and local taxes, and coupon rates are assigned based on a percentage of the long-term Treasury rates at the time of issuance.

Savings bonds must be held at least one year before they can be redeemed. If they are held for less than five years, a penalty of three months' interest will be assessed when the bonds are redeemed.

RELATED TERMS
  1. Sharpe Ratio

    A ratio developed by Nobel laureate William F. Sharpe to measure ...
  2. Series I Bond

    A non-marketable, interest-bearing U.S. government savings bond ...
  3. Savings Bond Plan

    A program that allows employees to purchase U.S. savings bonds, ...
  4. Non-Marketable Security

    Any type of security that is difficult to buy or sell because ...
  5. Interest

    1. The charge for the privilege of borrowing money, typically ...
  6. Bond

    A debt investment in which an investor loans money to an entity ...
Related Articles
  1. How long will it take for a bond to ...
    Bonds & Fixed Income

    How long will it take for a bond to ...

  2. How do I sign up for a TreasuryDirect ...
    Bonds & Fixed Income

    How do I sign up for a TreasuryDirect ...

  3. Savings Bonds For Income And Safety
    Bonds & Fixed Income

    Savings Bonds For Income And Safety

  4. The Bond Market: A Look Back
    Mutual Funds & ETFs

    The Bond Market: A Look Back

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  4. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center