U.S. Savings Bonds: what you should know

U.S. Savings Bonds are debt securities issued by the U.S. Treasury Department to help pay for the government’s borrowing needs. Many consider U.S. savings bonds to be one of the safest investments as they are backed by the U.S. government.

Interest on U.S. Savings Bonds

The interest earned on savings bonds, which are currently available for new purchase, is not paid out annually or semi-annually. The earned interest is paid out at redemption or maturity. After 30 years, the savings bond no longer earns interest. Interest earned from savings bonds is subject to federal income taxation only in the year the bond matures, is redeemed or reaches 30 years from the year of issue. The interest earned on U.S. Savings Bonds is subject to federal income tax, but not to state or local income tax.

Some U.S. Savings Bonds no longer earn interest: Series E and Series H bonds that are more than 30 years old and Freedom Shares or Savings Notes and Series HH bonds that are more than 20 years old. If you own any of these U.S. Savings Bond, you should redeem them.

Current U.S. Savings Bonds Series

The U.S. Treasury Department has issued numerous U.S. Savings Bond series since 1935. However, only two types of U.S. Savings Bonds are currently available for purchase:

Series EE, which offer a fixed rate of interest, and Series I, which offer a rate of interest adjusted for inflation.

Series HH bonds are no longer available for investment or exchange. Existing Series HH bonds pay a fixed interest rate via interest payments every six months.

U.S. Savings Bonds cannot be used as collateral and or assigned. They are effectively worthless to anyone except the named owners on the bond or an owner’s estate.

Purchasing U.S. Savings Bonds

U.S. Savings Bonds were issued in paper form until January 1, 2012. Currently, U.S. Savings Bonds are only issued in electronic form via a Treasury Direct account. If you wish, your paper bonds can be converted to electronic form. If you want to change a co-owner or beneficiary on a paper bond, you can do so if you open a Treasury Direct account and surrender the paper bonds. Bonds held in electronic form have automatic redemption at maturity and the owner can update any beneficiary designations easily. Additionally, holding bonds via a Treasury Direct account helps you maintain an inventory of your U.S. Savings Bond holdings.

To establish a Treasury Direct account online, go to the website There are no fees or commissions associated with the purchase of U.S. Savings Bonds.