Interest is paid on EE bonds until they reach 30 years or you cash them in, whichever comes first. After a year, you can cash them in. However, if you cash them before the 5th year, you will forfeit the final three months’ interest. (If you cash an EE bond after 18 months, you’ll get the first 15 months’ interest.)
When is the best time to cash in my EE savings bonds?
In about 30 years, most savings bonds stop earning interest (or achieve maturity). A savings bond can be redeemed as soon as one year after purchase, but it’s normally best to wait at least five years so you don’t miss out on the last three months of interest. If you redeem a bond after 24 months, for example, you will only receive 21 months of interest. It’s usually better to wait until your bond reaches full maturity, depending on the interest rate and your individual financial demands.
After 30 years, how much is a $50 EE savings bond worth?
Savings bonds are regarded as one of the most secure investments available. The underlying principle is that the value of a savings bond grows over time, but it’s easy to lose track of how much it’s worth over time.
The TreasuryDirect savings bond calculator, fortunately, makes determining the value of a purchased savings bond a breeze. You’ll need the bond series, face value, serial number, and issuance date to figure out how much your savings bond is worth.
If you bought a $50 Series EE bond in May 2000, for example, you would have paid $25. At maturity, the government committed to repay the face amount plus interest, bringing the total value to $53.08 by May 2020. A $50 bond purchased for $25 30 years ago is now worth $103.68.
What are the signs that my EE bond is no longer earning interest?
See TreasuryDirect.gov for a list of savings bonds that have stopped paying interest. You can also verify the status of Series E savings bonds issued in 1974 and later, as well as all Series EE bonds, using the Treasury Department’s Treasury Hunt service. If you provide your Social Security number, the program will tell you if you have any savings bonds that are no longer collecting interest in your name. If you have the bond in your possession, you’ll find instructions for cashing it in or filing a claim if you’ve lost it.
When an EE bond matures, what happens?
Series EE savings bonds likewise have a 30-year maturity. They will collect interest until they are redeemed, just like I bonds. There are two major differences between Series EE bonds and Series I bonds:
- They have a fixed rate of interest for the duration of the bond. The current annual rate is 0.10 percent.
- After 20 years of ownership, they give a one-time adjustment to double the face value.
Series HH bonds were previously issued savings bonds with a 20-year maturity. Since the final HH bonds were issued in August 2004, the last batch will mature in August 2024.
Because of the nature of savings bond math (more on this later), it’s best to keep your savings bonds for as long as you can to benefit from accrued and compound interest. Allowing your bond to appreciate in value over time is a wise decision, which is why you should only invest in savings bonds that you can live without for a period of time.
Accrued and compound interest
In the realm of savings bonds, “accrued” is merely another word for “accumulated.” Your bonds start earning interest the moment you buy them. Your bond’s value will increase on the last day of each month by the amount of interest you owe for the time you’ve owned the bond.
After 30 years, what happens to EE bonds?
Interest is paid on EE bonds until they reach 30 years or you cash them in, whichever comes first. After a year, you can cash them in. However, if you cash them before the 5th year, you will forfeit the final three months’ interest.
What is the best way to avoid paying taxes on EE bonds?
Cashing your EE or I bonds before maturity and using the money to pay for education is one strategy to avoid paying taxes on the bond interest. The interest will not be taxable if you follow these guidelines:
- The bonds must be redeemed to pay for tuition and fees for you, your spouse, or a dependent, such as a kid listed on your tax return, at an undergraduate, graduate, or vocational school. The bonds can also be used to purchase a computer for yourself, a spouse, or a dependent. Room and board costs aren’t eligible, and grandparents can’t use this tax advantage to aid someone who isn’t classified as a dependent, such as a granddaughter.
- The bond profits must be used to pay for educational expenses in the year when the bonds are redeemed.
- High-earners are not eligible. For joint filers with modified adjusted gross incomes of more than $124,800 (more than $83,200 for other taxpayers), the interest exclusion begins to phase out and ceases when modified AGI reaches $154,800 ($98,200 for other filers).
The amount of interest you can omit is lowered proportionally if the profits from all EE and I bonds cashed in during the year exceed the qualified education expenditures paid that year.
When you cash in your savings bonds, do you have to pay taxes?
Taxes can be paid when the bond is cashed in, when the bond matures, or when the bond is relinquished to another owner. They could also pay the taxes annually as interest accumulates. 1 The majority of bond owners choose to postpone paying taxes until the bond is redeemed.
What is the value of a $100 savings bond dated 1999?
A $100 series I bond issued in July 1999, for example, was worth $201.52 at the time of publishing, 12 years later.
What is the maturity date of Series EE bonds?
All Series EE bonds mature 30 years after they are issued. Every six months, the value of Series EE savings bonds purchased between May 1995 and April 1997 increases. The interest is compounded every six months.