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Savings Bonds
Treasury savings bonds are savings certificates which earn interest that accrues to the value of the bonds. The two types of savings bonds are series EE and series I bonds. Savings bonds can be purchased as paper certificates through banks or in electronic form with an account through the Treasury website. Only the original registered owner of a savings bond can redeem the bond. Savings bonds earn interest and grow in value for up to 30 years after issue.

Savings Bond Penalties
Although savings bonds are designed as long-term savings certificates, they can be cashed in early. The only period a series EE or I bond cannot be cashed is during the first year after issue. Penalties apply for bonds redeemed after the first year and before the bond is five years old. After five years, a savings bond can be cashed in for the full current value without penalty. The penalty in the first five years is the most recent three months of interest earnings. 

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