Series E Bond
A Series E Bond is a type of savings bond that was issued by the United States government from 1941 to 1979. These bonds were originally sold at 75% of their face value and were designed to mature at par value over a period that varied depending on the interest rates applicable at the time of issuance.
Key Features
- Issuing Period: 1941 to 1979.
- Issue Price: Sold at 75 cents per dollar of face value.
- Maturity Value: Bonds matured at par value.
- Interest Accrual: Interest was accrued yearly up to a maximum period of 40 years.
- Tax Reporting Options: Interest income could be reported annually, or the entire amount of interest could be reported when the bond was cashed.
Example Scenarios
- Individual Purchase: An individual buys a Series E Bond with a face value of $100, paying $75 at the time of purchase. When the bond matures, they will receive $100 plus any accrued interest if held until maturity.
- Tax Reporting: If a person buys a bond in 1950 and holds it until 1975, they can report the interest income annually or defer it until they cash out in 1975.
Frequently Asked Questions
1. Were Series E Bonds a good investment?
- Series E Bonds provided a secure and predictable return, making them a reliable investment for many Americans during their issuance period.
2. How long could a Series E Bond earn interest?
- A Series E Bond could earn interest for up to 40 years from its date of issuance.
3. Could the interest be reported after maturity?
- Interest could be reported annually or deferred until the bond was cashed, but interest accrual stopped after 40 years.
4. How was the interest rate determined for Series E Bonds?
- The interest rate for Series E Bonds evolved over time and was subject to federal regulations, reflecting market conditions.
5. Are Series E Bonds still available for purchase?
- No, issuance of Series E Bonds ended in 1979.
Related Terms
- Series EE Bond: A successor to the Series E Bond, these are savings bonds issued since 1980 that continue to be sold by the U.S. Treasury.
- Savings Bond: A government bond designed as a low-risk, secure investment to encourage savings.
- Treasury Bond: Long-term, fixed-interest debt securities issued by the U.S. Treasury.
Online Resources
Suggested Books for Further Studies
- Bond Pricing and Portfolio Analysis by Olivier de La Grandville
- The Bond Book: Everything Investors Need to Know About Treasuries, Municipals, GNMAs, Corporates, Zeros, Bond Funds, Money Market Funds, and More by Annette Thau
- Fixed Income Analysis by Barbara S. Petitt and Jerald E. Pinto
Fundamentals of Series E Bond: Savings Bonds Basics Quiz
### What years were Series E Bonds issued by the U.S. government?
- [ ] 1950 to 1990
- [x] 1941 to 1979
- [ ] 1930 to 1970
- [ ] 1960 to 2000
> **Explanation:** Series E Bonds were issued by the U.S. government from 1941 to 1979.
### What was the initial purchase price of Series E Bonds compared to their face value?
- [ ] 50%
- [ ] 60%
- [ ] 80%
- [x] 75%
> **Explanation:** Series E Bonds were sold at 75 cents per dollar of face value.
### How long can a Series E Bond continue to accrue interest?
- [ ] 20 years
- [ ] 30 years
- [x] 40 years
- [ ] 50 years
> **Explanation:** Series E Bonds accrue interest for up to 40 years.
### How can the interest income of a Series E Bond be reported for tax purposes?
- [x] Annually or at the time of cashing the bond
- [ ] Quarterly
- [ ] Monthly
- [ ] Only at the maturity of the bond
> **Explanation:** Taxpayers could choose to report the interest income annually or defer the report until the bond was cashed.
### Which agency was responsible for issuing Series E Bonds?
- [x] U.S. Treasury Department
- [ ] Federal Reserve
- [ ] Internal Revenue Service (IRS)
- [ ] Securities and Exchange Commission (SEC)
> **Explanation:** Series E Bonds were issued by the U.S. Treasury Department.
### What happens to the accrued interest on Series E Bonds after 40 years?
- [x] It stops accruing
- [ ] It is doubled
- [ ] It decreases
- [ ] It becomes tax-free
> **Explanation:** The accrued interest stops after 40 years from the issuance date.
### What replaced Series E Bonds after their issuance ended?
- [ ] Series D Bonds
- [x] Series EE Bonds
- [ ] Series H Bonds
- [ ] Series I Bonds
> **Explanation:** Series EE Bonds replaced Series E Bonds starting from 1980.
### What kind of interest rate did Series E Bonds offer?
- [ ] Variable interest rate
- [x] Fixed interest rate based on regulations
- [ ] No interest rate
- [ ] Dividends
> **Explanation:** Series E Bonds offered a fixed interest rate determined by federal regulations.
### Can Series E Bonds still be purchased today?
- [x] No, they are no longer issued
- [ ] Yes, through special request
- [ ] Yes, but only for institutional investors
- [ ] Yes, on the secondary market
> **Explanation:** Series E Bonds are no longer issued since 1979.
### Were Series E Bonds considered a high-risk or low-risk investment?
- [ ] High-risk
- [x] Low-risk
- [ ] No risk
- [ ] Market-dependent
> **Explanation:** Series E Bonds were considered a low-risk investment backed by the U.S. government.
Thank you for exploring the comprehensive details and quizzes about Series E Bonds. This knowledge contributes to a solid foundation in understanding investment in government securities.
