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One of the popular vehicles is the Series EE bond, which is a savings bond that pays a fixed rate of interest until maturity. Savings bonds offer you a way to earn a little extra on your cash, thanks to the power of compounding returns. When you choose Series EE bonds, you have the opportunity to double your investment if you hold them for 20 years.
The maturity dates for Series EE bonds depend on when they were issued. The maturity date is the point at which the U. As long as you cash in your bond at the maturity date, you can guarantee your investment will be double.
The Treasury Department makes an adjustment to the interest earnings if needed. Pendergast points out that the longer you hold your bond, the more likely you are to benefit from it. If you want full value, you should hold the Series EE bonds at least until maturity, and if you want extra, you can hold them until 30 years. In some cases, you might actually be better off cashing them in before maturity, Pendergast points out.
If you can move the money into a more liquid investment vehicle with higher returns, it might make more sense depending on your goals for the money. Series EE bonds issued after accrue interest at a fixed monthly rate, which is compounded semi-annually.
If you have bonds bought prior to that, especially paper bonds, the U. When deciding when to cash in your Series EE savings bonds, wait until after the compounding date. You can get an idea of when to expect your interest to be added to your bond with this chart:. Whether Series EE Savings bonds make good investments depends on your individual circumstances and goals. Your Money. Personal Finance. Your Practice. Popular Courses. Bonds Fixed Income Essentials. Table of Contents Expand.
History of U. Savings Bonds. Series EE Bonds. Series I Bonds. Series HH Bonds. Key Takeaways Savings bonds are sold by governments to their citizens to help fund federal spending, and provide savers with a risk-free return. Savings bonds are sold at a discount and do not pay regular interest.
Instead, as they mature, they increase in value until they reach full face value at maturity. The time to maturity for savings bonds will depend on which series issue is owned.
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Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Related Articles. Bonds How to Give Bonds as a Gift. You may also decide to pay tax on the interest every year.
This may be a good idea for bonds that a child owns. For the rest of the bond's life - this remaining time is known as the extended maturity period - we determine the interest rate the same way as in the original period, unless we announce otherwise before the extended period. As of , U. Savings Bonds go digital. Explore our interactive timeline to learn about their rich history. Department of the Treasury, Bureau of the Fiscal Service. Other Treasury Securities.
Replace or Reissue. EE Bonds May through April Market Based Savings Bonds Rates. When Interest is Added to Your Bonds. Tax Consider- ations. Death of a Savings Bond Owner. Patriot Savings Bond. On this page: Interest rate How do these EE bonds earn interest? How long do EE bonds earn interest? How does the value of my EE bond grow?
Do I pay tax on the interest? When do I pay tax?
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