May 1997 through April 2005 (EE Bond Rates and Terms)

This page covers EE Savings Bonds that were issued between May 1997 and April 2005.

On this page:

EE Bonds issued May 1997 – April 2005:  Interest rate

For the six-month rate periods that start in the months from November 1, 2012 through
April 30, 2013, the annual interest rate that applies to EE Bonds with issue dates from May 1997 through April 2005 is 0.63%.

EE Bonds issued from May 1997 through April 2005 earn a variable rate of interest. Treasury determines the rate each May 1 and November 1 and applies that rate for six-month rate periods that start in the next six months.

The rate that applies to a particular EE Bond with an issue date from May 1997 through April 2005 changes on the 6th and 12th month anniversary of that bond's issue date. For example, for an EE Bond with an issue date of September 1, 2003, a rate change announced in May takes effect on the following September 1 and a rate change announced in November takes effect on the following March 1.

How do these EE Bonds earn interest?

EE Bonds with issue dates from May 1997 through April 2005 earn interest from the first day of their first month.

  • The interest is added to the bond every month.
  • The interest is compounded semiannually. Twice a year, all the interest that the bond earned in the previous six months is added to the main (principal) value of the bond. Interest in the next six months is then earned on the new value. (In month 7, the bond earned interest on the original price + six months of interest. Now the bond is earning interest on the value that includes all the interest it earned up to the present six month period.)
  • All EE Bonds with issue dates from May 1997 through April 2005 are now at least five years old. Bonds that are at least five years old can be redeemed (cashed in) with no penalty (no loss of interest).

When do my EE Bonds earn interest?

EE Bonds earn interest from the first day of the month you buy them.

  • Interest is added to the bond every month.
  • The interest is compounded semiannually. Twice a year, all the interest that the bond earned in the previous six months is added to the main (principal) value of the bond. Interest in the next six months is then earned on the new value. In month 7, you earn interest on the original price + six months of interest.

    (However, the value of an EE Bond that is less than five years old does not include the latest three months of interest. See "Is there a penalty for cashing in early?" further down this page.)

How long do these EE Bonds earn interest?

Up to 30 years

How does the value of my EE Bond grow?

The original price of a paper EE Bond is half of its face value. (For example, you paid $25 for a $50 paper EE Bond. The face value of that paper EE Bond is $50.)

The paper EE Bond starts to earn interest on what it cost (not on its face value). Over time, with compounded interest, the paper EE Bond gets closer and closer to its face value.

The original price of an electronic EE Bond is its face value (not half of face value). Electronic bonds start to earn interest right away on the full face value.

Treasury guarantees that an EE Bond (whether paper bought at half of face value or electronic bought at full face value) will be worth at least double its purchase price when the bond reaches original maturity. Original maturity is a point part way into the bond's 30 year life.

  • For EE Bonds with issue dates from May 1, 1997 through May 1, 2003, original maturity is 17 years after the issue date.
  • For EE Bonds with issue dates from June 1, 2003 through April 1, 2005, original maturity is 20 years after the issue date.

If an EE Bond has not earned enough interest to be worth an amount that is double its purchase price on the date it reaches original maturity, Treasury will make a one-time adjustment on the original maturity date of the bond to make up the difference.

Do I pay tax on the interest?

As owner of an EE Bond, you pay federal income tax, but not state or local income tax, on the interest the bond earns.

If you use the bond money to pay certain qualifying educational expenses, you may not have to pay federal income tax on the interest. For additional information, see Using EE Bonds for Education.

When do I pay tax?

You may put off paying the tax until you file your federal income tax return for the year in which you redeem the EE Bond. (A few exceptions are some situations in which we reissue or re-register the bond.)

You may also decide to pay tax on the interest every year. (This may be a good idea for bonds that a child owns.)

For more details: Tax Considerations for EE/E Bonds.

How does Treasury decide on the interest rate for these EE Bonds?

For EE Bonds that we issued from May 1997 through April 2005, we determine the interest rate every May 1 and November 1 by

  • finding the average yields of 5-year Treasury securities for the previous six months
  • taking 90% of that number.

What have interest rates been for these EE Bonds?

Date the rate was set for EE Bonds issued
from May 1997 through April 2005		 Interest rate for the 6‑month rate periods
starting on or after that date
November 1, 2012 0.63%
May 1, 2012 0.81%
November 1, 2011 1.19%
May 1, 2011 1.77%
November 1, 2010 1.50%
May 1, 2010 2.16%
November 1, 2009 2.19%
May 1, 2009 1.64%
November 1, 2008 2.80%
May 1, 2008 2.74%
November 1, 2007 4.11%
May 1, 2007 4.15%
November 1, 2006 4.39%
May 1, 2006 4.11%
November 1, 2005 3.61%
May 1, 2005 3.42%
November 1, 2004 3.25%
May 1, 2004 2.84%
November 1, 2003 2.61%
May 1, 2003 2.66%
November 1, 2002 3.25%
May 1, 2002 3.96%
November 1, 2001 4.07%
May 1, 2001 4.50%
November 1, 2000 5.54%
May 1, 2000 5.73%
November 1, 1999 5.19%
May 1, 1999 4.31%
November 1, 1998 4.60%
May 1, 1998 5.06%
November 1, 1997 5.59%
May 1, 1997 5.68%