Series HH savings bonds are a kind of bond that was issued by the U.S. Treasury up until 2004. While investors can no longer buy new Series HH savings bonds, there are some bonds still being held by investors that haven't yet matured.
Learn how these unique bonds worked, and what happens to the few left out there today.
What Are Series HH Savings Bonds?
Series HH bonds were a type of savings bond program, offered by the U.S. Treasury, that regularly paid out cash to investors. They worked differently than Series EE savings bonds, which instead added the interest income back to the principal value of the bond. It was a way to encourage them to keep lending money to the taxpayer while enjoying passive income in the form of interest.
These bonds came with face values of $500, $1,000, $5,000, and $10,000.
This savings bond program was designed to reward patient, long-term investors who hold bonds to maturity.
How Do Series HH Savings Bonds Work?
When an investor bought a Series HH savings bond, they received a paper certificate that detailed the bonds they bought. If that investor wanted to cash in the bond early, then they needed to return that paper certificate.
While an investor held Series HH bonds, they would receive interest payments every six months. This interest income was deposited directly into the bondholder's bank account, providing a steady source of investment income that could be spent while the bond was still held.
Like all Treasury bonds, Series HH savings bonds were backed by the full faith and credit of the U.S. government. That has historically provided among the lowest levels of risk possible for an investor.
Series HH savings bonds had a minimum holding time of six months. If an investor bought one of these bonds, they had to hold it for at least six months. After that, they could cash in the bond for the full face value at any time.
The Interest Rate on Series HH Savings Bonds
The interest rate for the Series HH savings bonds was set every six months. When an investor bought a Series HH bond, they locked in that interest rate for 10 years. After 10 years, the rate could be adjusted for the next 10 years. Series HH savings bonds reached maturity and stop earning interest income altogether 20 years after the investor bought the bond. At maturity, the investor was repaid the face value of the bond.
Interest income received from Series HH savings bonds must be reported in the tax year it is received, but it is not subject to state and local taxes.
Like the Series I savings bond, the Series HH savings bonds can be redeemed for full face value at any time. That means investors didn't need to wait 20 years to get their principal back. However, once an investor receives their principal back, they will stop earning interest income.
While your local bank can't directly cash out the bonds for you, they can help you take the steps necessary to receive your principal back. This includes certifying your signature on documents and helping you mail bond certificates to the appropriate Treasury address.
The End of the Series HH Savings Bond Program
On September 1st, 2004, the U.S. Treasury Department stopped offering Series HH savings bonds to investors, ending the program altogether. While the Treasury continues to offer other kinds of bonds, there is not a Series HH replacement that perfectly replicates the features of this program.
Since Series HH savings bonds mature after 20 years, the last of these investment vehicles will mature in August 2024. That means it's likely that there are still Series HH savings bonds floating around out in the market somewhere. However, since these bonds can be cashed early, there may be fewer bonds remaining than were originally issued back in the early 2000s. The bonds that are still circulating will continue paying interest until they mature 20 years after their date of issue.
- Series HH savings bonds were a type of Treasury bond that directly deposited interest payments into an investor's account.
- These bonds matured after 20 years and paid interest every six months, but investors could cash in their bond for the full face value at any time.
- This bond program was ended in 2024, which means that last of these bonds will mature in August 2024—unless they're prematurely cashed in.