How is the interest rate of an EE Bond determined?
The interest rate of an EE Bond depends upon the original issue date. Series EE Savings Bonds issue dated on or after May 1, 2005 will earn a fixed rate of interest. These bonds increase in value every month, and interest is compounded semiannually. A 3-month interest penalty will apply to bonds cashed before five years. Some older EE Bonds earn interest based on 5-year Treasury security yields or at a guaranteed minimum. The rate that Treasury announces each May and November is applied to a bond for the 6-month earning period. For example, the 6-month earning period for a bond issued in May is from May through October; for a bond issued in June, it’s June through November.
