Series EE U.S. Savings Bonds Series EE U.S. Savings Bonds are sold by the Treasury and may be purchased by individuals at major banks. Investors can redeem the bonds at any time after six months, but it they are held for at least five years, a higher minimum rate is guaranteed. The interest earned is received when the bonds are redeemed. The most familiar of these securities are units of ownership in a pool of residential mortgages. GNMAs pay monthly payments, which contain both principal and interest, paid by homeowners.
Payments can vary as homeowners pay off mortgages early.
These have an initial maturity of 30 years, but an average life of 12 years because mortgages are paid off as homeowners sell, refinance or accelerate mortgage payments Treasury Bills Treasury bills do not pay coupon interest to the investor, but instead are issued at a discount. The Treasury issues new bills frequently. Treasury Bonds and Notes Treasury bonds are issued by the U.S. Treasury and are considered to be a very safe long-term investment. Treasury securities with 1 to 10 years to maturity when issued are called Treasury notes. Treasury bonds have from 10 to 30 years to maturity when issued.