One of the safest investments available is the Series EE savings bond, issued by the U.S. government.
“This is the most common type of bond and they are purchased at a discount and accrue interest monthly,” says Paul Sundin, CPA and financial adviser with Emparion. “The bonds mature after 20 years, at which point the U.S. Treasury will guarantee that investors have doubled their money.”
Even though savings bonds have a low rate of return, there are few investments that will guarantee to double your money — although you have to wait 20 years. In general, though, you can usually expect to earn more in interest with a Series EE savings bond than with a high-yield savings account, although the money in the savings account is more accessible.
If you have a Series EE savings bond, or if you’re interested in getting one, understanding the value before you cash it in is important. Here’s what you need to know.
Check the current value of your savings bond
You can cash in your Series EE savings bond any time after 12 months. However, Sundin warns, you won’t see the same level of returns if you cash in your bond before it matures in 20 years.
“The Treasury only waives the one-year rule if you experience a disaster and need to tap your cash sooner,” he says.
Additionally, Sundin points out, if you cash in your bond before it is five years old, you forfeit the last three months of interest. This can significantly reduce the total value of your savings bond. As a result, he cautions against getting these savings bonds unless you have a specific purpose for them in your portfolio.
Another feature of the Series EE savings bond is that you can also keep the bond beyond its maturity date. Sundin says you can earn interest for 30 years, making the bond even more valuable if you keep it for longer.
Checking the value of your bond, no matter how long you’ve had it, is fairly straightforward. You can go to the TreasuryDirect website and use the Savings Bond Calculator to get an idea. This calculator is aimed at those who have paper bonds, from earlier issue dates. In order to check the current value of your paper savings bond, you need:
- The issue date of the bond
- The bond series
- The denomination of the bond
This information can be found on the paper bond itself. You might need to take a close look at the bond to see all of the information.
Once you enter this information, the calculator can let you know what your paper bond is worth if you cash it in today. You can also use the calculator to determine the worth of the bond if you cash it in at a future date. TreasuryDirect also allows you to enter information from multiple bonds so you can create your own list and view the total value of your Series EE savings bonds.
If you have electronic bonds, you can log into your TreasuryDirect account — which was used to purchase the bonds in the first place — and see the value in your account information under the “Current Holdings” tab.
How do I cash in my savings bonds?
If you decide you want to cash in your Series EE savings bond, the process is fairly straightforward.
- Electronic savings bonds: These days, bonds issued are electronic. So, if you purchased your bond through TreasuryDirect, you can cash in your bonds on that website. Once you log into your account, you can find information on redeeming your bonds. The money will be directly deposited in a checking or savings account within two business days.
- Paper savings bonds: If you have older Series EE savings bonds, it’s fairly easy to simply take them to your financial institution and cash them there.
Remember, though, that it takes 20 years for a Series EE savings bond to mature. It’s also important to keep in mind that you only receive the guaranteed double of the face value if you hold the bond until maturity. While you can cash your savings bonds before then, you won’t get as high a return.