How long does it take for a series EE bonds to mature?
Series EE savings bonds mature on different dates if you own U.S. Treasury bonds.The EE bonds issued by the U.S. Treasury in 1981 took eight years to reach full face value, while the same bonds that were issued in 2020 will take 20 years.
Learn how long it takes Series EE savings bonds to mature, calculate the maturity dates of various bonds, and determine whether bonds are the right investment for your portfolio.
Zero-coupon bonds, also known as interest payments, add bond coupons to the bond's principal value rather than paying out periodically.
The Series EE bonds have different rates of interest when they are issued.The bonds have a fixed rate for up to 30 years.Older bonds purchased between 1997 and 2005 have a variable rate that changes twice a year, and bonds older than that have rates that depend on what year they were purchased.
You can find the value of your bonds by going to the Treasury's website or using their calculator.If you know when it was purchased, you can estimate the bond's value.
EE bonds used to be purchased at a discount and reached face value at maturity.If you purchase an EE bond today, you will pay face value and the bond will accrue interest as you hold it.Until the bond matures, it grows in value by the amount of interest accrued each year until either you cash it in or it reaches 30 years from the date of issue.
The U.S. Treasury Department guarantees that your EE bonds will mature in 20 years.Depending on their interest rate, some reach maturity sooner.
Check the issue date before you cash in your bonds.It's not possible to cash them in within a year.
You have to hold the bond for at least five years to avoid a penalty.The last three months of interest will be forfeited if you cash in before five years.
For example, bonds issued from November 2020 through April 2021 have an interest rate of 0.10%.
If you hold your bonds for 20 years and they still haven't reached their full face value, the Treasury will perform a one-time adjustment to bring up the bond's value so that you can cash it in for its full amount.
The Treasury compounds the interest on your bond semiannually, and it accrues monthly for bonds issued in May 2005 and after.
The rate is compounded semiannually for bonds issued between May 1997 and April 2005.Most bonds that were issued before May 1997 have interest added every six months.
Your bond will accrue interest until 30 years have elapsed from the date of issue.
If you cash out before the interest accrues again, you're leaving money on the table.
Series EE bonds issued from March 1993 through April 1995 have the following table of interest accrual dates.
You can decide if Series EE savings bonds make sense for your portfolio by knowing how long it takes to mature.If savings bonds aren't the right fit, you could choose another alternative, such as broadly diversified blue-chip stocks that generally earn at least 3%– 4% returns.
If you can tolerate higher levels of risk and don't mind seeing your account value fluctuate, stocks may be a better option.Your professional adviser and you can decide what works best for you.