What is a 'Series E Bond'

Series E Bonds were initially issued to finance the United States’ involvement in World War II. They were sold at a discount to face value and paid full face value at maturity. Series E Bonds remained available after the war as U.S. Savings Bonds and were replaced by Series EE in 1980.

Series E Bonds, first issued in May 1941 as defense bonds. The first purchaser of a Series E Bond was President Franklin D. Roosevelt. Series A through D was offered from 1935 to 1941. Series E became “war bonds” after the United States declared war on Japan in December of that year. 


Series E Bonds, sold as war bonds, were issued in denominations between $25 and $10,000. A war bond, initially known as defense bond, is a debt instrument issued by a government as a means of borrowing money to finance its defense initiatives and military efforts during times of war. 

Series E, war bonds were issued as baby bonds that sold for a minimum of $18.75 with a ten-year maturity. The bonds were zero-coupon bonds, meaning they did not pay regular interest but would pay the face value at maturity. They sell at a discount price of 75% of face value. E Bonds was initially issued with a fixed term of 10 years but were granted an interest extension of either 30 or 40 years, depending on the issue date. Large denominations of between $50 and $1000 were also made available.

War Bonds Through the Ages

During World War I, war bonds were Liberty Bonds and initially met with mixed success. The U.S. Treasury Department responded by enlisting celebrities to appeal to the American public’s sense of patriotism. The Series E campaign built on this success by marshaling the volunteer efforts of bankers, business executives, newspaper publishers, and Hollywood entertainers to support and promote the new bonds, which surpassed financial targets immediately. The initial drive aimed to generate $9 billion but exceeded that goal with income of $13 billion. The seventh drive raised the most substantial gross revenue of $26 billion over 48 days in 1945.

Following World War II, Series E Bonds became known as U.S. Savings Bonds. These bonds have become one of the most popular investments offered in the United States, as they provided the individual investor a safe, tax-free and affordable version of more substantial U.S. Treasuries or corporate or municipal bonds. They no longer offer a significant source of revenue for the U.S. government. The exchange of E Series bonds for H Series is allowed until  2004. That exchange is no longer offered. Instead, holders of mature Series E bonds can redeem them at financial institutions such as banks at an accrual value determined by the U.S. Treasury on a semi-annual basis. The final round of Series E Bonds stopped earning interest in 2010.

  1. Freedom Shares

    Original issue discount bonds issued by the U.S. Treasury from ...
  2. Series I Bond

    Series I bond is a non-marketable, interest-bearing U.S. government ...
  3. War Bond

    A war bond is a debt security issued by a government for the ...
  4. Straight Bond

    A straight bond is a bond that pays interest at regular intervals, ...
  5. Extraordinary Redemption

    An extraordinary redemption is a provision that gives a bond ...
  6. Government Bond

    A government bond is a debt security issued by a government to ...
Related Articles
  1. Investing

    How To Choose The Right Bond For You

    Bond investing is a stable and low-risk way to diversify a portfolio. However, knowing which types of bonds are right for you is not always easy.
  2. Investing

    Time to cash in your U.S. savings bonds?

    If your U.S. Savings Bonds are dated 1984 or earlier, they've reached maturity and have stopped paying interest. Cash them in pronto and put that money to work!
  3. Investing

    Why Bond Prices Fall When Interest Rates Rise

    Never invest in something you don’t understand. Bonds are no exception.
  4. Investing

    The Basics Of Bonds

    Bonds play an important part in your portfolio as you age; learning about them makes good financial sense.
  5. Investing

    Top 6 Uses For Bonds

    We break down the stodgy stereotype to see what these investments can do for you.
  6. Investing

    U.S. Corporate Bonds: The Last Safe Place to Make Money

    There aren't many other sources right now for relatively safe, steady income.
  7. Investing

    Bond Funds Boost Income, Reduce Risk

    Bond funds can provide stable returns for those who depend on their investment income.
  8. Investing

    Find The Right Bond At The Right Time

    Find out which bonds you should be investing in and when you should be buying them.
  1. Which factors most influence fixed income securities?

    Learn about the main factors that impact the price of fixed income securities, and understand the various types of risk associated ... Read Answer >>
Hot Definitions
  1. Internal Rate of Return - IRR

    Internal Rate of Return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.
  2. Limit Order

    An order placed with a brokerage to buy or sell a set number of shares at a specified price or better.
  3. Current Ratio

    The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term obligations.
  4. Return on Investment (ROI)

    Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency ...
  5. Interest Coverage Ratio

    The interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a company can pay interest ...
  6. Cash Conversion Cycle - CCC

    Cash conversion cycle (CCC) is a metric that expresses the length of time, in days, that it takes for a company to convert ...
Trading Center