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How Much Money Do Savings Bonds Earn?

The bottom line for returns on savings bonds sounds like the fable about the tortoise and the hare: slow and steady wins the race. Backed by the US government, savings bonds are considered safe. But a tradeoff for that safety is a relatively low rate of return.

  • New series EE and I bond rates are announced every six months.
  • If you redeem savings bonds within the first five years, you’ll be penalized a certain amount of interest.

What EE bonds earn

The current interest rate on Series EE bonds is 0.10 percent, through April 30, 2018. New interest rates are announced twice a year and take effect May 1 and November 1. EE bonds issued from May 2005 onward will earn the new rate. EE bonds issued from May 1997 through April 2005 continue to earn market-based interest rates set at 90% of the average 5-year Treasury securities yields for the preceding six months. Their interest rates change periodically. Earnings vary for Series EE bonds issued from 1980 to 1997, so consult your financial institution or the Bureau of Public Debt for exact figures. Many Series E bonds have stopped paying interest. You receive the interest earned along with your principal when you cash in the bond.

What HH bonds earn

Series HH bonds pay a fixed rate of interest from the date you purchased the bonds. The present rate is 1.5 percent and has been in effect since January 1, 2003. This rate is locked in for twenty years after purchase, after which Series HH bonds will stop paying interest. You receive interest payments on your HH bonds twice a year. Note: Series HH/H bonds have not been available for sale or exchange after August, 2004.

What I bonds earn

With a Series I bond, you receive the interest earned along with your principal when you cash in the bond. The federal government developed Series I bonds to assure investors a rate of return above inflation. Historically, some savings bonds have, in reality, lost purchasing power during periods of high inflation. Series I bonds bought from November 1, 2017 through April 30, 2018 will earn 2.58% interest during this six-month period. The rate for Series I bonds issued during this period is a combination of a fixed rate (fixed for the life of the bond) plus an adjustable rate (adjusted every six months) based on inflation. The fixed rate changes every six months as well, though you are locked into it when you buy your bond.

Note that if you redeem I bonds within the first five years, you’ll forfeit the 3 most recent months’ interest; after 5 years, you won’t be penalized.

For current US savings bond rates, go to

The earnings on securities or other investments, whether they are dividends or interest, realization of profits or receipts, income, or some other source.
A non-marketable savings instrument of the US Treasury available in several series, such as Series I, Series EE, and Series HH. Most are sold at a discount.
A percentage that indicates what borrowed money will cost or savings will earn. An interest rate equals interest earned or charged per year divided by the principal amount, and expressed as a percentage. In the simplest example, a 5% interest rate means that it will cost $5 to borrow $100 for a year, or a person will earn $5 for keeping $100 in a savings account for a year.
A legal document that is a promise to repay borrowed principal along with interest on a specified schedule or within a certain time period (the bond’s maturity). Federal, state, and local governments, corporations, and other types of institutions raise capital by selling bonds to investors.
A place where buyers and sellers make transactions. Sometimes the term also refers to the specific demand for an investment, such as in the stock market or the commodity market.
1. An investment document that a corporation, government, or other organization issues as proof of debt or equity. 2. The debt or equity itself.
The rate of return on an investment, described as a percentage of the amount of the investment. For example, a $1,000 bond with a 7 percent yield would pay out 7 percent of $1,000, or $70 per year.
The net income of a business, investment, or individual over a specific period, such as a quarter-year.
A charge for using another’s money. Interest is usually stated as a percentage of the amount borrowed and can be charged in a variety of ways, such as accrual, compounding, or simple interest.
1. The amount borrowed, or the part of the amount borrowed that remains unpaid (not including future interest). 2. The part of a monthly payment that reduces the outstanding balance of a mortgage or other loan. 3. The original investment amount of a security. 4. In banking terms, principal is the original deposit or loan on which interest is earned or paid.
1. Currency and coins. Cash is also known as legal tender. 2. The currency, coins, bank balances, and (negotiable) money orders and checks that a business owns. 3. Assets that are highly liquid or marketable, with little or no risk of market loss.
A predetermined interest rate.
A rise in the general price level of goods and services; inflation is the opposite of deflation. The Consumer Price Index and the Producer Price Index are the most common measures of inflation. As a probable result of inflation, labor asks for higher wages to buy more, prices rise to meet those wages, and inflation becomes a cycle.
A measure of money’s value in terms of what it can buy. Purchasing power tends to change over time, mainly because of inflation. Also called buying power.
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