Series EE Bonds in 2025: Rates, Benefits & Australian Relevance

Series EE Bonds have been a mainstay in the United States for generations, promising safe, government-backed returns. But as Australia’s financial markets evolve and global interest rates shift, investors and savers are questioning whether these traditional savings bonds still make sense—especially in 2025. This article unpacks Series EE Bonds, reviews their latest rates and policy updates, and examines their relevance for Australians looking to diversify or stabilise their portfolios.

What Are Series EE Bonds?

Series EE Bonds are U.S. government savings bonds designed to be low-risk, long-term savings vehicles. Issued by the U.S. Treasury, they are purchased at face value and accrue interest monthly for up to 30 years. The interest is compounded and paid out when the bond is redeemed. EE Bonds have historically appealed to risk-averse investors, particularly those saving for education or long-term goals.

• Safety: Backed by the U.S. government, Series EE Bonds are considered virtually risk-free from default.
• Interest Rate: As of May 2025, new EE Bonds offer a fixed interest rate of 2.70% per annum, set each May and November.
• Tax Advantages: In the U.S., interest income may be tax-deferred until redemption and can be tax-free if used for qualified education expenses. However, Australian residents are taxed on global income, so local tax rules apply.

2025 Policy Updates and Market Trends

The U.S. Treasury announced in May 2025 that the fixed rate for newly issued EE Bonds is 2.70%, reflecting a modest uptick from previous years as global interest rates edge higher post-pandemic. The Australian financial environment, meanwhile, has seen the RBA keep the cash rate steady at 4.35%, with local savings products competing more aggressively for deposits.

Key 2025 updates:

• Interest Rate Comparison: Australian high-interest savings accounts now offer rates between 4.10% and 4.75% p.a., outpacing EE Bonds’ fixed 2.70% (not accounting for currency risk).
• Currency Considerations: Australians buying U.S. bonds face AUD/USD currency risk, which can erode returns if the Aussie dollar strengthens.
• Access and Liquidity: EE Bonds must be held for at least one year, and redeeming before five years means forfeiting the last three months of interest—a key difference from Australian term deposits or savings accounts.

Are Series EE Bonds Relevant for Australians?

While Series EE Bonds aren’t directly marketed to Australian investors, some globally minded savers and expats consider them for diversification. Here’s what to weigh in 2025:

• Comparative Yields: Australian fixed income products currently offer higher yields and easier access for local residents.
• Taxation: Interest on overseas bonds must be reported on your Australian tax return, often reducing the net benefit.
• Alternatives: ASX-listed government bonds, ETFs, and high-yield savings accounts may deliver similar or better risk-adjusted returns without the currency hassle.

For Australians with a U.S. connection—such as dual citizenship, residency, or education plans—Series EE Bonds may still play a role, especially given their guaranteed doubling of value if held for 20 years. But for most local investors, homegrown options offer greater simplicity and better yields in 2025.

Practical Examples

Case 1: Australian Expat Saving for U.S. University Fees
A Brisbane family with dual citizenship buys Series EE Bonds to fund future tuition at an American university. The bonds’ guaranteed value doubling at 20 years provides peace of mind, and the interest could be tax-advantaged under U.S. rules for education.

Case 2: Local Investor Seeking Safe Income
An Australian retiree compares Series EE Bonds to local bank term deposits and finds that, after currency conversion and tax, local products offer superior net returns and easier access.

The Bottom Line

Series EE Bonds remain a safe and predictable savings product, but in 2025, their appeal for Australians is limited by lower yields, tax treatment, and currency risk. For most, high-interest savings accounts, term deposits, and ASX-listed fixed income options offer better value and simplicity. Still, for those with U.S. ties or specific cross-border needs, Series EE Bonds can play a niche role in a diversified strategy.