What Savings Bonds Pay Now

Ask Kim

The Interest Rates on EE Savings Bonds Just Went Up

The increase went into effect on May 1, but it is not much.

I want to buy savings bonds for my grandkids. What is the interest rate now on EE savings bonds?

See Also: What You Need to Know About U.S. Savings Bonds

Interest rates increased slightly on May 1, and all EE savings bonds issued from May 2015 through October 2015 will earn 0.30% interest per year. The Treasury Department resets the rate for new EE savings bonds every six months. The rates have been very low for the past few years: less than 1% since November 2011, bottoming out at 0.10% for EE bonds issued from November 1, 2014, to April 30, 2015.

EE savings bonds issued in May 2005 or later have a fixed interest rate for up to 30 years, based on the rate when you purchase the bond. (All EE bonds stop earning interest after 30 years.) The interest accrues monthly and is compounded twice a year. You can cash out anytime after holding the bond for a year, but you’ll lose three months’ worth of interest if you redeem bonds before you’ve owned them five years.

Longtime bondholders get a bonus: If you hold the bond for 20 years, the Treasury Department promises to double your initial investment, regardless of the annual interest rate. After the bump-up at 20 years, the bond will continue to earn interest at the original fixed rate for the last 10 years, unless new terms are announced before then. See TreasuryDirect for more information about the rules for EE savings bonds issued in May 2005 or later.

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