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SERIES EE SAVINGS BONDS TO EARN 3.50% FIXED RATE FOR MAY THROUGH OCTOBER 2005 ISSUES

FOR RELEASE AT 10:00 AM EST

May 2, 2005

The Bureau of the Public Debt today announced a fixed rate of 3.50% for Series EE savings bonds issued from May 1 through October 31, 2005. Fixed rates for future issues will be set each May 1 and November 1, as previously announced by Public Debt. Interest accrues monthly and compounds semiannually. Bonds held less than five years are subject to a three-month interest penalty. EE bonds have an original maturity of 20 years, and an interest-bearing life of 30 years.

SERIES EE BONDS ISSUED FROM MAY 1997 THROUGH APRIL 2005

Series EE bonds issued from May 1997 through April 2005 continue to earn market-based interest rates set at 90% of the average 5-year Treasury securities yields for the preceding six months. The new interest rate for these bonds, effective as the bonds enter semiannual interest periods from May 1 through October 1, 2005, is 3.42%. Market-based rates are announced effective each May 1 and November 1. A 3-month interest penalty is applied to these bonds if they are redeemed before being held five years. The bonds increase in value monthly and interest is compounded semiannually.

SERIES EE BONDS ISSUED BEFORE MAY 1997

Series EE Bonds issued before May 1997 earn various rates for semiannual earnings periods beginning between May 1 and October 1, 2005, depending on dates of issue.

MATURED SERIES E SAVINGS BONDS AND SAVINGS NOTES

Series E savings bonds continue to reach final maturity and stop earning interest. Bonds issued from May 1941 through April 1965 along with those issued from December 1965 through April 1975, have stopped earning interest. All Savings Notes, issued from May 1967 through October 1970, have stopped earning interest. Series E Bonds with issue dates from May through October 1965 and May through October 1975 will reach final maturity during the next six months.

MORE INFORMATION

Savers and investors can open an on-line account to purchase EE Bonds in electronic form through Public Debt's website www.treasurydirect.gov. Account holders can purchase, manage, and redeem electronic EE Bonds over the Internet 24 hours a day, seven days a week.

Information about savings bonds also is available through www.treasurydirect.gov. Check out our Savings Bond Calculator to see how easy it is to find out what your bonds are worth, what they're earning, and even keep track of them. Or, download the free Savings Bond Wizard™ to keep track of your savings bond portfolio. An Earnings Report, which contains rate and yield information for bonds is available by mail. Send a postcard asking for “Earnings Report” to Bureau of the Public Debt, 200 Third Street, Parkersburg, WV 26106-1328.