Two types of U.S. Savings bonds are offered to full-time employees through payroll deduction.
Series EE Bond Maturity
At a minimum, the Treasury guarantees a bond’s value will double after 20 years, and will continue to earn the fixed rate set at the time of issue unless a new rate or rate structure is announced. If a bond does not double in value as the result of applying the fixed rate for 20 years, the Treasury will make a one-time adjustment at the original maturity to make up the difference.
I Bonds
I Bonds are sold at face value and grow with inflation-protected earnings for up to 30 years. You can invest as little as $50 or as much as $30,000 per year. They are safe because they are U.S. Treasury securities backed by the full faith and credit of the U.S. Government. I Bonds are sold at face value in denominations of $50, $75, $100, $200, $500, $1,000, $5,000 and $10,000. You can defer Federal taxes on earnings for up to 30 years and they're exempt from state and local income taxes.
The earnings rate of I Bonds is a combination of two separate rates: a fixed rate of return and a semiannual inflation rate. Each May 1 and November 1, the Treasury announces a fixed rate of return that applies to all I Bonds issued during the six month period beginning with the effective date of the announcement. The fixed rate of return carried by any given I Bond will never change. Also, every May 1 and November 1 the Treasury determines a semiannual inflation adjustment based on changes in the Consumer Price Index for all Urban consumers (CPI-U). The semiannual inflation rate is then combined with the fixed rate of an I Bond to determine the bond's earnings rate for the next six months. I Bonds earn interest from the first day of the month. An I Bond's issue date is the month and year when full payment is received by and I Bond issuing agent, the U.S. Federal Reserve.
I Bond Maturity
You can cash your I Bond any time after one year and get your original investment plus earnings. I Bonds are meant to be longer term investments so if you cash a bond within the first five years, you will forfeit three months' earnings.
For brochures and enrollment forms, contact the Compensation and Benefits Department at 557-2334.
Series EE Bonds
Series EE Savings Bonds issued after May 1, 2005, will earn a fixed rate of interest. The new fixed rate will apply for the 30-year life of each bond, which includes a 10-year extended maturity period. Interest accrues monthly and is compounded semiannually. Savings bonds must be held a minimum of one year, and there is a three-month interest penalty applied to bonds held less than five years from issue date. The purchase price of a bond is 50% of its face value; for example, a $100 bond costs $50. Bonds in denomination of $100, $200, $500, and $1,000 may be purchased through the payroll deduction savings program.