Series EE savings bonds give you an opportunity to defer tax; see below. EE bonds may only be purchased online from Treasury Direct at www.treasurydirect.gov . They must be held 12 months from the issue date before they can be redeemed. Bonds cashed in any time before five years are subject to a three-month interest penalty; see the Example below.
Series EE savings bonds with an issue date on or after May 1, 2005, earn a fixed rate of interest. Interest accrues monthly and is compounded semiannually. EE bonds issued from May 1997 through April 2005 continue to earn market-based interest rates set at 90% of the average five-year Treasury securities yields for the preceding six months; these rates change every May 1 and November 1. EE bonds issued before May 1997 earn various rates depending on the date of issue.