Maturity of Series EE Bonds Explained If you own US Treasury securities, you might have noticed that some Series EE savings bonds mature on various dates. It took eight years for the EE bonds issued between May 1981 and October 1982 to reach full face value. It will take 20 years for the same EE bonds issued in 2020 to reach their full face value. Knowing how long Series EE savings bonds take to mature and being able to calculate their maturity dates can be beneficial. Learn how to select the bonds that are most suitable for you.
Maturity Dates for Series EE Bonds
Savings bonds work in the same way that zero-coupon bonds do. Instead of being paid out on a regular basis, bond coupons, or interest payments, are added to the bond's principal value. The difference in maturity dates is due to the different interest rates built into each Series EE bond at the time of issue. Bonds issued in 2022 have a 30-year fixed interest rate. The interest rate on older bonds issued between 1997 and 2005 is variable and changes twice a year. Bonds purchased before that year have rates that are determined by the year they were purchased. Tip: To find out how much your electronic bonds are worth, go to the Treasury's website and use the calculator there. If you know when your bond was purchased, you can also estimate its value. EE bonds were purchased at a discount and eventually matured at face value. EE bonds are currently purchased at face value, meaning a $50 EE bond will cost $50. An interest rate of 0.10 percent is paid on EE bonds purchased from May to October 2022. In 20 years, however, regardless of the interest rate, the EE bond will be worth twice what you paid for it. To fulfill this guarantee, the Treasury makes a one-time change. Series EE bonds have the following maturity dates:- From January to October 1980, a total of 11 years passed.
- Nine years, from November 1980 to April 1981
- Eight years, from May 1981 to October 1982
- Ten years, from November 1982 to October 1986.
- 12 years, from November 1986 to February 1993
- 18 years, from March 1993 to April 1995
- 17 years, from May 1995 to May 2003
- Since June 2003, it's been 20 years.
When it comes to waiting, how long should you wait?
Your EE bonds are guaranteed to mature in 20 years by the US Treasury, but some mature sooner. It is determined by the interest rate that is built into their system. Before you cash in your bonds, make sure you check the issue dates. You can't cash them in for more than a year after they've been issued. Warning: The bond must be kept for at least five years to avoid a penalty. You will miss the previous three months' interest if you cash out before five years. Some bonds may have a very low-interest rate. Interest is paid at a rate of 0.10 percent on bonds issued between May and October 2022. The Treasury will occasionally make a one-time adjustment to the bond's value, allowing you to cash it in for its full face value. This could happen if you've held your bond for 20 years and it still hasn't reached its full face value.How Interest Compounds and Accumulates
A bond's interest rate is set in stone. It is calculated every month for bonds issued after May 2005. The interest rate on bonds issued between May 1997 and April 2005 is increased every month. It's compounded twice a year. For most bonds issued before May 1997, interest is compounded every six months. Even if your bond has reached maturity, interest will continue to accrue until 30 years have passed since the issue date. If you're considering cashing out a savings bond, make sure to check the compounding date first. You'll be wasting money if you cash out before the interest starts to accrue again. The following table of interest accrual dates applies to Series EE bonds issued before March 1993, Series EE bonds issued from May 1995 to April 1997, and Series EE bonds issued from March 1993 to April 1995: Series EE Bond Semiannual Interest Accrual Dates If the month of the issue is: On the first day of the month, interest will be added: January or July January and July February or August February and August March or September March and September April or October April and October May or November May and November June or December June and DecemberSeries EE Bonds: Alternatives
When you know how long Series EE savings bonds take to mature, you can decide whether they're a good fit for your portfolio. If savings bonds aren't a good fit for you, you can look into other options. One possibility is to invest in a broad portfolio of blue-chip stocks that yield 3 to 4% annual returns. Stocks may be a much better option if you can tolerate higher levels of risk and don't mind seeing your account value fluctuate, especially given the current low-interest rate trend. You're only interested in the cash flow and aren't concerned with some risk. You and your adviser can determine what works best based on your needs, goals, and resources.Most Commonly Asked Questions (FAQs)
What is the difference between a Series EE savings bond and a Series EE savings bond?
A Series EE savings bond is a low-risk investment that the government of the United States backs. It will continue to pay interest for the next 30 years or until you sell it, whichever comes first.What is the procedure for redeeming a Series EE bond?
Your electronic Series EE bonds can be redeemed directly on the TreasuryDirect website. Although paper bonds are no longer issued, you can still cash them in at most financial institutions.What is the maturity date of my Series EE bond?
Purchased in June 2003, Series EE bonds mature 20 years after the issue date. They will continue to earn interest for the next 30 years or until they are redeemed. Bonds purchased before June 2003 have already matured, but they will continue to earn interest until they reach the age of 30.