1.1) What is original maturity?
Original maturity is the MAXIMUM amount of time it takes for a Series E/EE bond
or Savings Note to reach face value. The following chart shows the original
term for Series EE bonds:
| Issue Date | Original Term |
|---|
| 1/80 - 10/80 | 11 years |
| 11/80 - 4/81 | 9 years |
| 5/81 - 10/82 | 8 years |
| 11/82 - 10/86 | 10 years |
| 11/86 - 2/93 | 12 years |
| 3/93 - 4/95 | 18 years |
| 5/95 - present | 17 years |
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1.2) Does my bond stop earning interest at original maturity?
No. After your bond reaches original maturity, it automatically enters one
or more extension periods (usually ten years long). During extensions, bonds
issued prior to May 1995 earn interest based on a guaranteed yield or a
market-based yield. The applicable guaranteed yield is the one in effect at the
time the bond enters the extension. Bonds issued after April 1995 have no
guaranteed minimum yield. They will earn interest in accordance with the terms
and conditions in effect at the time they enter the extension.
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1.3) When does my bond stop earning interest?
Bonds stop earning interest at final maturity. The following table shows final
maturity periods for Savings Bonds and Savings Notes:
| Series | Issue Date |
Final Maturity |
|---|
| E | 5/41 to 11/65 |
40 years |
| E | 12/65 to 6/80 |
30 years |
| EE | All issues |
30 years |
| H | 6/52 to 1/57 |
29 years, 8 months |
| H | 2/57 to 12/79 |
30 years |
| HH | All issues |
20 years |
| Savings Notes | All issues |
30 years |
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1.4) What are the guaranteed minimum rates on Series E/EE bonds and Savings
Notes?
The following table gives the applicable guaranteed rates:
| Bonds issued on these dates: |
Earn a Guaranteed Minimum Rate of: |
|---|
Series E
11/64-5/65
8/77-2/78
Series EE
11/82-2/83
8/90-2/93 |
6% |
Series E
8/62-10/64
6/65-11/65
8/72-7/77
3/78-6/80
Series EE
1/80-10/82
3/83-7/90
3/93-4/95 |
4% |
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1.5) How do market rates affect bonds?
E/EE bonds and Savings Notes issued prior to May 1995 are entitled to market-based
yields if they've been held for at least five years and if such rates produce
a value greater than derived from the application of guaranteed minimum yields.
(Market yields are based on 85% of the average of 5-year Treasury marketable
security yields).
EE bonds issued on or after May 1995 do not have a guaranteed rate of return.
EE bonds issued May 1997 or later earn interest based on 90% of the average
yields on 5-year Treasury securities for the preceding six months. These
bonds increase in value every month and interest is compounded semiannually.
The new rate is announced each May 1 and November 1.
EE bonds issued May 1995 through April 1997 earn short-term market-based rates
during the first five years after issue and long-term market-based rates from
5 years through 17 years. The rate your bond is earning is adjusted to
market-based rates every six months. New rates are announced each
May 1 and November 1.
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1.6) What is the easiest way to find out the current interest rate on my E
and EE bonds?
Just take a look at our Savings Bond Earnings Report
. This report will tell you what your bond is currently earning and will
give you the current value of $100 E and EE bonds. If you don't happen to have
$100 bonds, it's no problem. It's simple to calculate the value for bonds of
other denominations since they are proportional. For example, if you have a $50
bond, just divide the value of the $100 bond by 2. If you have a $500 bond,
multiply the value of the $100 bond by 5.
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1.7) Why do some bonds show very low semiannual earnings in the Earnings
Report?
Some Series E and EE Bonds are still covered by an old market-based interest
formula that was modified in May 1989. Under this formula, the market-based
rate was rounded to the nearest 1/4 percentage point. Since market rates have
generally declined during that period, the market-based rate would sometimes
decline by 1/4 percentage point. Redemption values are based on the market-
based rate (or higher guaranteed rate) for the period during which the
bond/note is entitled to market-based investment yields, not each separate
semiannual interest period; so during such a semiannual interest period the
increase in the bond's value would be far below current rates.
Bonds issued or entering extended maturity periods since May 1989 are no longer
subject to quarter-point rounding. Interest is calculated to the nearest .01%
and there are no more exceptionally large changes in current interest yields.
Eventually, no Savings Bonds will remain under the old formula.
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1.8) I have some old bonds that have reached final maturity. What can I do with
them?
Series E/EE bonds and Savings Notes can be redeemed at final maturity or they
can be exchanged for Series HH current income bonds. If you redeem your bonds,
and you have deferred reporting interest for Federal income tax purposes, you
should report all accrued interest in the year in which they reach final maturity.
If you exchange your matured bonds for HH bonds within a year after they reach
final maturity, you can continue to defer reporting interest earnings on the
exchanged E/EE securities until the HH bonds are redeemed, disposed of, or reach
final maturity. H/HH bond interest must be reported annually.
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