Series HH Bond

AAA

DEFINITION of 'Series HH Bond'

A 20-year non-marketable U.S. government savings bond that pays semi-annual interest based on a coupon rate. This coupon is locked in at a fixed rate for the first 10 years, after which it is reset by the U.S. Treasury for the rest of the bond's life. Interest on Series HH bonds is exempt from state and local - but not federal - taxes.


INVESTOPEDIA EXPLAINS 'Series HH Bond'

Series HH bonds were no longer available for purchase or exchange as of August 31, 2004.
Denominations were available in amounts ranging from $500 to $10,000 with no capital appreciation potential, but early redemption and exchange options after six months.

For many current HH bondholders, once the 10-year locked in rate expired, the coupon rate would fall as low as 1.5%. Investors should calculate the real return being earned to determine whether holding onto these bonds is the wisest choice or if the money received in redeeming the bonds could be put to better use in higher yield securities.

RELATED TERMS
  1. Series I Bond

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

    A program that allows employees to purchase U.S. savings bonds, ...
  3. Series E Bond

    Accrual bonds that were issued at 75% of the face amount. Interest ...
  4. Bond

    A debt investment in which an investor loans money to an entity ...
  5. Maturity Date

    The date on which the principal amount of a note, draft, acceptance ...
  6. Real Rate Of Return

    The annual percentage return realized on an investment, which ...
RELATED FAQS
  1. How long will it take for a bond to reach its face value?

    The time it takes a savings bond to reach face value depends on the series of bond and the value at which it was sold. There ... Read Full Answer >>
Related Articles
  1. Retirement

    Projected Returns: Honing The Craft

    Find out how to forecast long-term returns on the three major asset classes.
  2. Bonds & Fixed Income

    Savings Bonds For Income And Safety

    Bonds offer undeniable benefits to investors, including safety and tax advantages.
  3. Retirement

    Bond Basics Tutorial

    Investing in bonds - What are they, and do they belong in your portfolio?
  4. Options & Futures

    The Perks of Trading Coffee Options

    As more people begin to trade coffee, we explain how coffee options work, who uses them, what drives valuations, and the risks and rewards.
  5. Trading Strategies

    Top Day Trading Instruments

    Day trading is an intense and often appealing activity. Investopedia provides the list of top financial instruments for day trading.
  6. Mutual Funds & ETFs

    Preferred Stock ETFs: Are They Right for You?

    Considering preferred stock ETFs? Here's a look at their pros and cons.
  7. Mutual Funds & ETFs

    PIMCO vs. BlackRock: Weighing Mega Fund Managers

    A look at the world's biggest bond manager and the world's largest asset manager.
  8. Mutual Funds & ETFs

    The ABCs of Mortgage-Backed Securities ETFs

    ETFs focused on mortgage-backed securities, or MBS, offer an opportunity to further diversify the fixed-income portion of your portfolio.
  9. Options & Futures

    Give Yourself More Options With Real Estate Options

    Real estate options have many benefits, including a smaller initial capital requirement.
  10. Economics

    What Would Happen If Interest Rates Rise?

    This time around, while U.S. long-term yields have rebounded from their January lows, rates have generally been lower than where they ended 2014.

You May Also Like

Hot Definitions
  1. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  2. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  3. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  4. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  5. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  6. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
Trading Center