The U.S. Treasury recently announced the availability of Patriot Bonds. Patriot Bonds are Series EE savings bonds purchased through financial institutions or over the Internet at the Savings Bonds Direct Web site. Bonds bought this way will be specially inscribed with the words "Patriot Bond."
Why is Treasury designating these Series EE bonds as Patriot Bonds? Because many Americans have expressed a desire to show their support for the rebuilding and war efforts. Purchasing a Patriot Bond is one way they can do so.
Money invested in Patriot Bonds will not be specifically earmarked for the War on Terrorism, however. Instead, proceeds from the sale of all Treasury securities, including Patriot Bonds, are deposited into the general U.S. Treasury and spent according to law. The funds will contribute to recovery and war efforts.
You can place an order for Patriot Bonds at any of thousands of financial institutions serving as savings bond agents nationwide. Contact your bank and ask if they offer savings bonds. Online buyers can order via Savings Bonds Direct at www.savingsbonds.gov.
Series EE savings bond denominations are: $50, $75, $100, $200, $500, $1,000, $5,000, and $10,000. The purchase price is one half the face amount. For example, a $100 Patriot Bond costs $50.
Series EE savings bonds earn 90 percent of market yields on 5-year Treasury securities. Bonds increase in value every month, and interest is compounded semiannually. You can cash in your bond after six months, but bonds cashed in before they are five years old are subject to a 3-month interest penalty. EE bonds stop earning interest at 30 years.
Savings bond rates are announced each May 1 and November 1 for the following 6 months. The 6-month earning period for rates announced on May 1 is from May through October and, for rates announced on November 1, from November through April. The rate in effect through April 30, 2002 is 4.07%.
Series EE bonds are free from state and local income taxes. Federal tax on interest earned can be deferred until you cash in a bond or it reaches its 30-year-maturity, whichever happens first.
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