How to Calculate Interest on Treasury HH Bonds
Series HH savings bonds are obtained by trading in Series E or EE bonds that have matured. HH bonds pay interest every six months to bond holders until they reach maturity. After the maturity date an HH bond can be redeemed with the Treasury for the face amount of the bond. Treasury HH bonds have not been issued since 2004, but bonds that have not yet matured will still pay interest.
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Instructions
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Check the issue date of the bonds. Series HH bonds can fall into one of three interest paying categories: HH bonds over 20 years old are no longer paying interest; they can be redeemed for the face amount. The second category is bonds issued before 2003 but less than 10 years old. The final category is all other HH bonds.
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Determine the interest from the face amount for the second category bonds. These are bonds issued before January 2003 and less than 10 years old, and they earn interest at 4 percent per year until they enter extended maturity after 10 years, when they will earn 1.5 percent. Here is the semi-annual interest payment for the first 10 years based on the bond face amount: for a $500 bond, $10 every 6 months; for a $1,000 bond, $20 every 6 months; for a $5,000 bond, $100 every 6 months; and for a $10,000 bond, $200 every 6 months. These bonds will pay this rate until they are 10 years old and then change to the over-10-year rate.
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Determine the interest earned for bonds older than 10 years from issue and less than 20 years. These bonds earn interest at a rate of 1.5 percent per year. Here is the interest payment amount for the different bond denominations: for a $500 bond, $3.75 every 6 months; for a $1,000 bond, $7.50 every 6 months; for a $5,000 bond, $37.50 every 6 months; and for a $10,000 bond, $75 every 6 months.
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Tips & Warnings
HH bonds can be redeemed at any time for the face amount. The bonds must have the signature guaranteed at a bank and the bonds are mailed to the U.S. Treasury. The redemption amount is paid electronically into a designated bank account.
