Series E bonds were a type of savings bond introduced by the federal government in 1941. While you can’t buy a Series E bond from the government today, you can still buy them from investors who own them.
The Series E savings bond was built on the model of its predecessors, the Series A to D bonds, which helped the U.S. government raise money during the Depression. Series E bonds were called “defense bonds,” later called “war bonds,” were designed to help raise funds to bolster national defense ahead of and after the United States’ entry into World War II.
In 1980, Series E bonds were replaced by Series EE bonds.
How much a Series E bond is worth today can depend on several factors. Keep reading to learn about the history of Series E bonds, and what they’re worth now.
What Is a Bond?
A bond is a debt instrument. Bonds are issued by corporations or governments in order to raise capital, and the bond market is huge — much larger than the equity markets. (In 2020, the market cap of the global bond market was about $160 trillion, versus $95 trillion for the stock market.) Investors provide capital to companies and governments when they buy the bonds, effectively loaning their money to that institution.
Meanwhile, the bond issuer agrees to pay investors the capital back, along with interest, after a certain period.
There are different of bonds investors can purchase, including:
• Municipal bonds, which are issued by municipal governments and used to fund public works
• Corporate bonds, which are issued by private and public corporations
• Investment-grade bonds
• U.S. Treasuries
A savings bond is a type of U.S. Treasury. These bonds are issued with the full faith and credit of the U.S. government, meaning there’s virtually no chance of losing money. Savings bonds allow the government to borrow money for various purposes while giving investors a reliable and predictable stream of interest income.
Recommended: How Do Bonds Work?
Series E Bond
What is an E bond? A Series E bond was a type of bond that was first issued in the 1940s as part of a national defense fundraising effort.
In the 1930s, the U.S. government had launched the savings bond program — Series A through D — to help raise funds for programs that addressed unemployment during the Depression.
As concerns over World War II grew, and the possibility of the U.S. entering the war became a reality, President Franklin D. Roosevelt introduced Series E bonds in early 1941, calling them “defense bonds.”
This nickname eventually shifted to “war bonds” after the U.S. entered the war following the attack on Pearl Harbor in December 1941. Americans were encouraged to buy Series E bonds in order to help support the war effort. In return, the holder of an E bond was able to collect interest from the government. It’s estimated that Series E bonds raised $185 billion to fund the war effort. After the war, Series E bonds were simply referred to as savings bonds.
Understanding Series E Bonds
The popularity of Series E bonds may have hinged largely on the patriotic call to purchase them as part of the war effort. Buying bonds served two purposes: It helped the government to raise money for the war and it also helped to keep inflation at bay as shortages threatened to push consumer prices up. Apart from that, there were other qualities that might have made a Series E saving bond attractive.
These bonds were issued at 75% of their face value and returned 2.9% interest, compounded semiannually if held to 10-year maturity. So investors were able to earn a decent rate of return on their investment.
Series E bonds were also affordable, with initial denominations ranging from $25 to $1,000. Larger denominations of $5,000 and $10,000 were added later, along with two smaller memorial denominations of $75 and $200 to commemorate the deaths of President Kennedy and President Roosevelt, respectively.
Series E bonds were redeemable at any time after two months following the date of issue. Bond purchasers could redeem them for the full face value, along with any interest earned.
Interest from Series E bonds was taxable at the federal level but exempt from state and local taxes, adding to their appeal. And because they were issued by the federal government, they were considered a safe investment.
Recommended: Understanding the Yield to Maturity (YTM) Formula
Series E Bond Maturity Rate
The maturity rate for E bonds depends on when they were first issued. For example, Series E savings bonds issued between May 1941 and April 1952 had an initial 10-year maturity term. All of these bonds reached final maturity 40 years from their issue date. So if your grandparents bought a Series E savings bond in 1941, they would have reached final maturity and stopped earning interest in 1981.
Here’s a table showing the maturity dates for Series E bonds over time:
| Issuing Period | Original Maturity Period | Final Maturity |
|---|---|---|
| May 1941 – April 1952 | 10 years | 40 years from issue |
| May 1952 – January 1957 | 9 years, 8 months | 40 years from issue |
| February 1957 – May 1959 | 8 years, 11 months | 40 years from issue |
| June 1959 – November 1965 | 7 years, 9 months | 40 years from issue |
| December 1965 – May 1969 | 7 years | 30 years from issue |
| June 1969 – November 1973 | 5 years, 10 months | 30 years from issue |
| December 1973 – June 1980 | 5 years | 30 years from issue |
The last Series E savings bonds were issued in 1980. Those bonds stopped paying interest in 2010.
Are Series E Bonds Right for Me?
Series E bonds are no longer issued, so you can’t purchase them. But it’s possible that you may own some Series E bonds that were purchased by your grandparents or parents, then passed down to you. The value of a Series E saving bond today depends on the original face value of the bond, the interest rate the bond earned, and how long they were earning interest.
If you have some of these bonds, you may be wondering whether to keep them or redeem them. Since they’re no longer earning interest, it could make sense to redeem them for cash. You can check the value of Series E bonds online with the Treasury Direct.
The Treasury regularly publishes a table of redemption values and interest earned for all savings bonds issued, including Series E bonds, along with a guide on how to cash in E bonds. For a time, you could exchange E Series bonds for H/HH Series, but that’s no longer an option. Today, mature Series E bondholders can redeem their bonds at an accrual value determined by the U.S. Treasury on a semi-annual basis. Series E Bonds stopped earning interest in 2010.
If you’re interested in other types of bonds, the Treasury still issues Series EE bonds and I Bonds. Both Series EE bonds and Series I bonds pay interest for 30 years or until you redeem them.
Series EE bonds are designed to be used to pay for higher education expenses and between the two, I bonds earn a higher interest rate. Both can be purchased online through TreasuryDirect.gov.
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Other Investment Options
The bond market can offer a safe place to invest and earn interest. But they’re only one way to put your money to work. Depending on how much risk you’re comfortable taking on, what type of return you’re after and how much flexibility you need in accessing your money, you may consider one of these alternatives instead.
Savings Accounts
A savings account is a deposit account that’s designed to hold the money you don’t plan to spend right away. You can find various types of savings accounts at traditional banks, credit unions, and online banks. Savings accounts can pay interest, though not all at the same rate. High-yield savings accounts at online banks, for example, tend to pay much higher rates than basic savings accounts at brick-and-mortar banks.
A savings account can offer convenience since you can link it to a checking account and make transfers or withdrawals as needed. Keep in mind that your bank may limit the number of withdrawals you’re allowed to make each month. Your bank may also charge excess withdrawal fees and/or monthly maintenance fees for a savings account.
Stocks
If you’re unclear about how stocks work, they effectively represent an ownership share in a company. When you buy shares of stock, you’re buying an ownership stake in a publicly-traded company. The way you make money with stock investing is by buying low and selling high. In other words, you want to purchase stocks at one price then sell them for a higher price.
Stock trading can be a more powerful way to build wealth over time versus keeping money in a savings account or buying bonds. But there’s a tradeoff since stocks tend to be much riskier than bonds or savings accounts. Buying shares of mutual funds or exchange-traded funds (ETFs) which hold a collection of different stocks as well as bonds is one strategy for managing that risk.
Cash Equivalents
Cash equivalents are assets that are similar to cash in terms of liquidity and value. Cash equivalents include savings accounts, money market accounts, certificates of deposit (CDs), and cash management accounts.
Holding money in cash equivalents can allow you to earn interest, though typically not at the same level as money that’s invested in stocks. But cash equivalents can provide a safe haven for funds that you’d like to keep liquid and accessible either for the short or long term.
Recommended: Bonds vs. CDs: What’s Smart for Your Money?
Banking With SoFi
The Series E savings bonds, originally issued as war bonds to raise money during World War II, are like a living piece of history. While the bonds still exist, and you may have inherited E bonds (or you can purchase them through other bondholders), they’re not available through the usual government bond channels. Still, savings bonds are important to understand, as holding these long-term instruments to maturity can be quite profitable. And while the government may not issue Series E anymore, investors can still buy Series EE or Series I bonds, among others. These U.S. savings bonds offer a steady rate of return and low risk.
If you’re committed to saving, bonds are not your only option. SoFi offers a number of ways to grow your money while minimizing risk — including SoFi’s new all-in-one Checking and Savings. You can sign up for an account right from your phone and pay zero account fees — and if you qualify, and sign up with direct deposit, you can earn a competitive APY.
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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
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