Series HH Bond

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. Maturity Date

    The date on which the principal amount of a note, draft, acceptance ...
  5. Bond

    A debt investment in which an investor loans money to an entity ...
  6. Real Rate Of Return

    The annual percentage return realized on an investment, which ...
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. Projected Returns: Honing The Craft
    Retirement

    Projected Returns: Honing The Craft

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

    Savings Bonds For Income And Safety

  4. Bond Basics Tutorial
    Retirement

    Bond Basics Tutorial

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 ...