Savings Bond Alert #003

Thursday, June 24th, 2004
Categorized as: Savings Bond AlertsSeries HH or H US Savings Bonds

New analysis shows converting to series HH bonds is a bad idea for almost everyone

Based on the questions we receive from our readers, we can tell that there’s a great deal of confusion about the Treasury’s decision to stop issuing Series HH Savings Bonds at the end of August.

Some HH bond owners think they will have to cash in their existing HH bonds. This is false – and also a bad move for those holding older HH bonds that are paying 4%.

Existing HH bonds will continue paying interest until they reach final maturity – there will be HH bonds outstanding for the next 20 years. There just won’t be any new ones after the end of August.

Some Series EE bond owners think they are being required to convert their EE bonds to Series HH. This is also false.

In order to help our readers make a knowledgeable decision about whether to convert to Series HH or not, we recently completed a Series HH conversion analysis.

The full analysis is included in the Is tax-deferral better than higher rates? chapter of my book, but in a nutshell it shows that most people would be better off keeping the Savings Bonds they have than converting to 1.5% Series HH bonds. There are a few exceptions, which I go into in the analysis.

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FDIC Insured Certificates of Deposit can pay 1 or 2% more than savings bonds when held for a similar length of time. See top CD Rates Below:

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June 1, 2010

After six years, over 400 posts, 3,680 real comments, and over 90,000 spam comments (thank you, Akismet, for making managing a blog with comments possible), I am closing public comments on I will contine to update the main articles on this site, but not the comments.

Virtually every question about Savings Bonds has been asked and answered on this site multiple times. Use the search feature (see the box in the gray area near the top of this page) or the detailed menu on the lower part of the home page to find the information you're looking for. If you have a copy of Savings Bond Advisor, you can ask me a question here.

Tom Adams

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