- Series EE savings bonds are exempt from state and local income tax.
- Series EE savings bonds can be deferred until redemption if you use the cash tax reporting option.
- In the past, investors could exchange Series EE savings bonds for Series H/HH bonds, thereby deferring taxes and extending the 30 year period on which you can earn interest. The Treasury halted this program in 2004.
- If you meet the income requirements, Series EE savings bonds can be used to pay for certain higher education expenses without paying taxes on any of the interest income you earned over the years.
For more information, read Tax Advantages of Investing in Series EE Savings Bonds. If you want to invest in Series EE savings bonds but don't know how, read The 4 Ways to Buy Series EE Bonds for a quick explanation of the process.