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US Savings Bonds can no longer be purchased at G.A.P. Federal Credit Union. However, we will continue to redeem savings bonds at any of our branches. The following  is for informational purposes only:



Series EE bonds are Treasury securities that earn interest through periodic increases in value for up to 30 years. The purchase price of a bond is 50 percent of its face amount; for example, a $100 bond costs $50. Bonds are available in $50, $75, $100, $200, $500, $1,000, $5,000, and $10,000 denominations.

The minimum holding period for Series EE has been extended from 6 months to 12 months, effective February 1, 2003. Bonds issued January 2003 and earlier will continue to have a 6-month minimum holding period.

Bonds issued on and after May 1, 1995, earn interest from purchase through original maturity based on market yields for Treasury securities.

Each May 1 and November 1, Treasury will announce the rate that will apply to Series EE Bonds.

Interest will be added to the value of the bonds every six months. Bonds will increase in value six months after purchase and every six months thereafter.

Original maturity is 17 years after the issue date and final maturity is 30 years after the issue date. Bonds stop earning interest at final maturity.

Interest Exclusion. The interest earned on EE bonds purchased on or after January 1, 1990, may qualify for exclusion from income for Federal income tax purposes if the bond owner pays tuition and required fees at colleges, universities, and qualified technical schools during the year the bonds are redeemed. Costs of room, board, and books are not treated as educational expenses for this purpose. The exclusion applies to the post-secondary educational expenses of the taxpayer, his or her spouse, and any legal dependent. Since income and other limitations apply, this feature will benefit some, but not all, bond owners.

Only bonds issued in the name of a person who was 24 or older on the first day of the month in which the bonds were purchased can be used for the tax exclusion feature.

Bonds intended for the education of dependent children must be issued in the name(s) of the taxpayer(s) for whom the child is a dependent. Bonds issued in the name of a child as owner or coowner are not eligible, but a child may be named as beneficiary.

Redemption records for EE bonds that meet the requirements for the interest exclusion should be kept separate from all other bonds. This is important because the taxpayer will have to determine how much interest can be excluded from gross income in the year the bonds are redeemed and used for eligible education expenses.

SERIES I – Looking for a safe investment that protects your savings from inflation for up to 30 years? Get a hold of the new I Bond. Series I bonds are based on a straight-forward idea. It’s unique benefits make it an ideal way to build up savings you simply don’t want to risk. What can be more comforting than knowing that you own an investment that guarantees you returns over and above the rate of inflation for up to 30 years.

I Bonds are sold at face value in denominations of $50, $75, $100, $200, $500, $1,000, $5,000 and $10,000.

Bonds earn interest up to 30 years through application of a composite rate. The composite rate consists of a fixed rate that remains the same for the life of the bond and an inflation rate that is subject to change twice a year. The inflation adjustment is based on the Consumer Price Index for all Urban consumers (CPI-U). This rate is then combined with the fixed rate to determine the Earnings Rate for the next six months. Interest accrues monthly and compounds semiannually.

The minimum holding period Series I bonds has been extended from 6 months to 12 months, effective February 1, 2003. Bonds issued January 2003 and earlier will continue to have a 6-month minimum holding period. If an I Bond is redeemed within the first five years old, you will forfeit three months’ earnings.

Interest earnings are subject to Federal taxes.

If you qualify, you can exclude all or part of the interest on I Bonds from income s long as the proceeds are used to pay for tuition and fees at eligible, post-secondary educational institutions. See Interest Exclusion above. Details are available in IRS Publication 550, “Investment Income and Expenses.”


August 2004 will be the last issue month for HH/H bonds. After August 31, 2004, you will no longer be able to reinvest your HH/H bonds or exchange your EE/E bonds for HH bonds.

Funds invested in Series HH bonds do not represent a significant portion of all the funds invested in savings bonds, but do result in a substantial administrative expense for handling exchanges. As it moves toward a paperless savings bond program, Treasury decided to stop issuing Series HH bonds, rather than develop a paperless version. For more information, log on to

Do you have other questions, or need to know redemption values?



Education Tax Exclusion

The savings bond education tax exclusion permits qualified taxpayers to exclude from their gross income all or part of the interest paid upon the redemption of eligible Series EE and I Bonds issued after 1989, when the bond owner pays qualified higher education expenses at an eligible institution. More information available at:

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