Use EE Bonds to Build Your Savings and Save for College

Series EE savings bonds are safe, low-risk savings products that pay interest based on current market rates Use your EE Bonds to: * Finance education * Supplement retirement income * Give as a gift The rates and terms for your EE Bond are determined when your bond is issued.It is currently 3%.

Series EE bonds now issued in paper are sold at a 50% discount to face value. A Series EE paper bond issued today with a face amount of $1,000 costs $500 and will be worth $1,000 in 17 years. Bonds will continue to earn interest semiannually for another 13 years beyond the 17-year maturity date.

Electronic bonds are issued at face value.

Bonds may be purchased by mail and can be bought and redeemed at banks, savings and loan associations, and other local agencies.

You can buy bonds online at www.treasurydirect.gov.

The Current Interest Rate is 3.00% through April 30, 2008.
The minimum purchase: $25 for a $50 EE Bond when buying paper bond certificates.
$25 for a $25 EE bond when buying electronically via TreasuryDirect

Maximum Purchase per calendar year: $5,000 in TreasuryDirect and $5,000 in paper bonds (purchase price)

The Denominations are: Paper bonds: $50, $75, $100, $200, $500, $1,000, $5,000, and $10,000

Electronic bonds via TreasuryDirect: $25 or more, designated amounts you choose

Here is your tax information on E/EE Bonds
* Interest earnings are exempt from State and local income taxes, but are subject to Federal, State, and local estate, inheritance, gift, and other excise taxes.
* Interest earnings are subject to Federal income tax.
* Interest earnings may be excluded from Federal income tax when bonds are used to finance education .

When used for children's gifts, a 1040 tax form should be filed for the child each year after receiving the gift, declaring the annual accrued interest. Then, when turned-in, there would be no taxable income until the child's total investment income exceeds the amount below which no Federal tax is levied. The child is listed as the sole owner, and a parent or another child is beneficiary.