Finance Quick Answers
What are Patriot Bonds, how do they work and how can I buy them?
Patriot Bonds are Series EE savings bonds, which are specially inscribed with the words "Patriot Bond." The Patriot Bond series began December 11, 2001. Bonds increase in value every month, and interest is compounded semiannually. You can cash your bond after six months. Bonds cashed before they are five years old are subject to a 3-month interest penalty. EE bonds stop earning interest at 30 years. These bonds are free from state and local income taxes. Federal tax on interest earned can be deferred until you cash the bond or it reaches maturity (whichever occurs first).
You can purchase the Patriot Bond at any of thousands
of financial institutions serving as savings bond
agents. You can contact your bank or financial
institution to see if they provide this service. You can
also purchase this bond via the Internet at
These bonds, however, cannot be purchased through
payroll savings plans due to the fact that bonds bought
through a payroll savings plan are processed by many
different organizations using a variety of inscription
Dr. Joyce Cavanagh, Former Assistant Professor and State Specialist, Consumer and Family Economics
Department of the Treasury
Last update: Friday, July 25, 2008