A comprehensive overview of the Series HH Bond, a type of U.S. government bond once available in exchange for Series E or EE bonds, including its history, functions, and cessation.
The Series HH Bond was a type of U.S. government savings bond that provided investors a safe, interest-bearing investment option. These bonds were available in denominations ranging from $500 to $10,000 and could only be acquired through direct exchange of Series EE or E bonds.
Series HH Bonds offered a fixed interest rate that was paid semi-annually. The interest rate was set at the time of issuance and remained constant throughout the bond’s lifespan.
Series HH Bonds were available in the following denominations:
Series HH Bonds had a maturity period of 20 years, although they stopped earning interest after the first 20 years.
One of the significant advantages of Series HH Bonds was the tax deferral on the interest earned from the Series E/EE bonds that were exchanged to obtain them. While Series HH bonds paid interest semi-annually, the interest was subject to federal income tax but exempt from state and local taxes.
Series EE bonds, unlike HH bonds, accrue interest that is subject to federal income tax at the redemption or maturity time. They can also be purchased directly via TreasuryDirect, rather than requiring an exchange process.
Series I bonds are another modern alternative, offering inflation-protected interest rates, which combine a fixed rate with an inflation-adjusted rate.
Q: Can I still purchase Series HH bonds? A: No, Series HH bonds are no longer issued as of August 31, 2004.
Q: Do existing Series HH bonds still earn interest? A: Yes, existing HH bonds continue to earn interest until they mature.
Q: Are Series HH bonds subject to state tax? A: No, interest earned on Series HH bonds is exempt from state and local taxes but is subject to federal income tax.