Savings Bond Calculator

Yes, for EE bonds issued on or after May 1, 2005. The Treasury sets a fixed rate at purchase, and the bond accrues that rate compounded semiannually for 20 years. If the fixed rate would not get the bond to twice its face value by month 240, the Treasury makes a one-time adjustment to bring the value up to 2x the issue price. This guarantee only applies at exactly the 20-year mark; redeeming earlier means you get only what the fixed rate has produced.

EE bonds reach final maturity at 30 years and stop earning interest entirely. At that point you should redeem them: every additional month you hold a matured bond is interest you are not earning anywhere else. Final maturity also triggers federal income tax on all accrued interest, even if you do not actually redeem, so most owners cash in at or shortly after 30 years.

EE bonds are sold electronically only, through TreasuryDirect (treasurydirect.gov). Paper EE bonds were discontinued on January 1, 2012, and banks no longer sell savings bonds. The minimum purchase is $25 and bonds are issued in any penny amount up to the annual $10,000 per-Social-Security-number limit. You buy at face value: a $100 bond costs $100 and starts earning interest the first day of the month it was issued.

Possibly. Under Internal Revenue Code Section 135, EE bond interest may be excluded from federal income tax when proceeds pay qualified higher-education expenses in the same year and the ownership, age, filing-status, income, and expense-allocation rules are met. The bond owner must generally have been at least 24 before the issue date, and a bond in a child's name does not meet that ownership rule for a parent's exclusion. The income phaseout changes by tax year, so use that year's IRS Form 8815 instructions. EE bond interest is generally exempt from state and local income tax.

You cannot redeem an EE bond within the first 12 months at all. Between months 12 and 59 (just under 5 years), you forfeit the most recent 3 months of interest as an early-redemption penalty. After 5 years there is no penalty: you can redeem at any time and keep all accrued interest. The penalty is a fixed Treasury rule, not a market valuation, so the math is the same whether interest rates have risen or fallen since you bought the bond.