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What's the best time to cash in savings bonds?

Dr. Don TaylorDear Dr. Don,
I recall reading about the importance of timing when you cash in savings bonds -- i.e. time of month you purchased them and time you cash them in. The timing makes a big difference in your interest as I recall, but now I can't find the article and hope you can help me.
Super Saver

Dear Saver,
There is an art to cashing in your savings bonds, but it's not a lost art. In fact, the Bureau of Public Debt will help you determine the best time to cash those bonds. I got the following facts from that Web site.

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If you cash in a Series EE bond before it is five years old, you'll give up its last three months of interest.

Savings bonds issued prior to May 1, 1997, generally earn interest every six months. You want to cash in bonds with semiannual interest payments just after the interest payment date. If you cash in the bond prior to its interest payment date, you won't receive any interest income for the time held since the last interest payment date.

It's a good idea to cash or exchange bonds early in the month in which they increase in value or pay interest because interest accrues and is paid on the first day of that month. (Regardless of what day you bought the bond originally.)

See the Bureau of Public Debt's page, When Your Savings Bonds Increase in Value, for more information on redemption for Series EE/E savings bonds along with some links to Series I and Series HH information.

 
-- Updated: May 11, 2005
     

 

 
 
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