What is a 'Series EE Bond'

The Series EE Bond, also known as the "Patriot Bond" is 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.

BREAKING DOWN '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 were re-issued as Patriot Bonds after the September 11, 2001 terrorist attacks. They are identical in every way to the paper Series EE Bonds except that any paper bonds purchased through a financial institution after December 10, 2001 have the words "Patriot Bond" printed on the top half of the bond between the Social Security Number and the issue date. Financial institutions no longer issue Series EE bonds in paper form, but the paper "Patriot Bonds" can still be cashed or converted to electronic bonds. 

Paper bonds were 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. Savings Bond Plan

    A program that allows employees to purchase U.S. savings bonds, ...
  2. Discount Bond

    A bond that is issued for less than its par (or face) value, ...
  3. U.S. Savings Bonds

    A U.S. government savings bond that offers a fixed rate of interest ...
  4. Bond Yield

    The amount of return an investor will realize on a bond. Several ...
  5. Bond Ladder

    A portfolio of fixed-income securities in which each security ...
  6. Corporate Bond

    A debt security issued by a corporation and sold to investors. ...
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

    Savings Bonds For Income And Safety

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

    What Taxable Interest Must Bond Investors Report?

    Many factors impact the amount of taxable interest bond investors must report.
  4. 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 stopped paying interest. Cash them in pronto and put that money to work!
  5. Investing

    Corporate Bond Basics: Learn to Invest

    Understand the basics of corporate bonds to increase your chances of positive returns.
  6. Investing

    An Introduction to Individual Bonds

    Individual bonds are better than bond funds and can be a key component to one’s investment strategy.
  7. Investing

    Investing in Bonds: 5 Mistakes to Avoid in Today's Market

    Investors need to understand the five mistakes involving interest rate risk, credit risk, complex bonds, markups and inflation to avoid in the bond market.
  8. Investing

    The Basics Of Bonds

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

    Top 6 Uses For Bonds

    We break down the stodgy stereotype to see what these investments can do for you.
RELATED FAQS
  1. What is the difference between EE and I Bonds?

    Read about the similarities and differences between the EE and I savings bond programs created by the U.S. Department of ... Read Answer >>
  2. How long will it take for a bond to reach its face value?

    Learn when different savings bonds reach face value, and determine the best time to cash them in to get the highest return ... Read Answer >>
Hot Definitions
  1. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  2. Promissory Note

    A financial instrument that contains a written promise by one party to pay another party a definite sum of money either on ...
  3. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
  4. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  5. Absolute Advantage

    The ability of a country, individual, company or region to produce a good or service at a lower cost per unit than the cost ...
  6. Nonce

    Nonce is a number added to a hashed block, that, when rehashed, meets the difficulty level restrictions.
Trading Center