Freedom Shares

Freedom shares are original issue discount bonds issued by the U.S. Treasury from May 1967 to October 1970 with a 30-year maturity. They also are known as savings notes.

Freedom shares were sold in denominations of $25, $50, $75, $100, $200, $500, $1,000, $5,000, and $10,000. They were issued on a discount basis at 81 percent of the face amount. For example, a $100 face value bond would have been purchased for $81.00. Savings notes are registered, definitive securities that are not transferable. Freedom shares reached final maturity 30 years from issue date. They were available only in combination with Series E Bonds of the same or greater denominations as a way to encourage individuals to save and invest in U.S. Treasury savings securities.

Savings notes such as freedom shares can be redeemed at a financial institution or Federal Reserve Bank at any time at the most recent semiannual accrual value. For one year after the month in which they reach final maturity, savings notes could have been exchanged for Series HH bonds with continued deferral of taxation on note interest included in the purchase price of the Series HH bonds received in exchange. The original term to maturity was four and a half years. Optional extensions of maturity of two 10-year periods and an additional five-and-a-half-year period were granted to make the notes' total interest-earning life span 30 years. Savings note interest is reportable for Federal income tax purposes for the year in which the note is redeemed, reaches final maturity, or is otherwise disposed of, whichever occurs first. The note owner may report interest each year as it accrues; however, such election must apply to all of an owner's accrual-type securities. Freedom shares were not eligible for the tax-free educational feature.

Series E Bonds were introduced in May 1941 with a coordinated national volunteer program that enlisted the nation's financial institutions, community leaders, volunteer committees, and advertising and communications media to promote the new bond. Bankers, business executives, newspaper publishers and Hollywood entertainers successfully supported the Treasury and the savings bonds program for more than 60 years. Many Fortune 500 company executives served on the U.S. Savings Bonds Volunteer Committee, which, from 1963 through 2003, promoted the payroll savings plan. The Series E bond became the world's most widely held security. As the Defense Bond of 1941, the War Bond of 1942-45 and subsequently just the U.S. savings bond, it was purchased by tens of millions of U.S. citizens. As of June 1980, Series E Bonds were replaced by Series EE Savings Bonds.