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Portfolio > Mutual Funds > Bond Funds

Treasury Releases Rates on I Bonds, EE Bonds

By Melanie Waddell

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Treasury’s Bureau of the Public Debt announced Monday earnings rates for Series I Savings Bonds and Series EE Savings Bonds, issued from Nov. 2010 through April 2011. Earnings rates for I bonds and fixed rates for EE bonds are set each May 1 and Nov. 1, the Bureau states.

Interest accrues monthly and compounds semiannually, the Bureau states. Bonds held less than five years are subject to a three-month interest penalty. Both series have an interest-bearing life of 30 years; the EE bond fixed rate applies to a bond’s 20-year original maturity.

The earnings rates are as follows, according to the Bureau:

I Bond Earnings Rate of 0.74% includes Fixed Rate of 0.00%
The earnings rate for Series I Savings Bonds is a combination of a fixed rate, which applies for the life of the bond, and the semiannual inflation rate. The 0.74% earnings rate for I bonds bought from Nov. 2010 through April 2011 also will apply for the succeeding six months after the issue date. The earnings rate combines a 0.00% fixed rate of return with the 0.74% annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U). The CPI-U increased from 217.631 in March 2010 to 218.439 in Sept. 2010, a six-month increase of 0.37%.

Series EE Bonds Issued May 2005 and After
Series EE bonds issued from Nov. 2010 through April 2011 will earn today’s announced rate of 0.60%.(Series EE bonds issued since May 2005 are earning interest at a fixed rate, depending on the rate set when the bond was issued).

Series EE Bonds Issued from May 1997 through April 2005
Series 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. The new interest rate for these bonds, effective as the bonds enter semiannual interest periods from Nov. 2010 through April 2011, is 1.50%. Market-based rates are announced effective each May 1 and Nov. 1.

Series EE Bonds Issued Before May 1997
Series EE bonds issued before May 1997 earn various rates for semiannual earnings periods, depending on dates of issue.

Matured Series EE/E Savings Bonds
All Series E savings bonds stopped earning interest as of June 2010. Additionally, Series EE savings bonds are beginning to reach final maturity, and therefore will stop earning interest.Series EE bonds issued from Jan. 1980 through Nov. 1980 are no longer earning interest, and those issued from Dec. 1980 through April 1981 will stop earning interest during the next six months.

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