Series EE Bond Maturity Period: A Comprehensive Guide with Timelines


Series EE Bond Maturity Period

When it comes to investing in safe options, government bonds are a preferred choice for many as they are guaranteed by the U.S. government. One popular type of government bond is the Savings EE bond, which offers a fixed rate of return and can be purchased for as low as $25. With compounded returns, these bonds provide an opportunity for investors to earn additional income.

Investors who opt for Series EE bonds can potentially double their initial investment if they hold onto them for a period of 20 years. However, the nominal rate of return is often lower than what is offered by top online savings accounts. It is important to note that these bonds can only be purchased electronically through Treasury Direct.

Let’s take a closer look at workings of Series EE bond maturities : An insight into what to expect when investing in them

Maturity dates for Series EE bonds

Currently, Series EE bonds offer a guaranteed fixed interest rate for a duration of 20 years, which marks their maturity period. Upon maturity, the government ensures that investors are paid double the face value of the bond. While the guaranteed interest rate ends at 20 years, these bonds do not technically expire until 30 years.

According to Jim Pendergast, General Manager of altLine by The Southern Bank, “All Series EE bonds expire in 30 years, which means you have up to 30 years to let the interest add up and compound, even though you can redeem your bond at any time.”

By redeeming your bond at its maturity date, you can ensure that your investment doubles. For instance, if you purchase a Series EE bond for $25 today and hold it for 20 years, you can redeem it for $50. The Treasury Department adjusts the interest earnings as needed.

However, historical data indicates that Series EE bonds have matured in less time. Here are the historical maturity dates for Series EE bonds:

  • January – October 1980: 11 years
  • November 1980 – April 1981: 9 years
  • May 1981 – October 1982: 8 years
  • November 1982 – October 1986: 10 years
  • November 1986 – February 1993: 12 years
  • March 1993 – April 1995: 18 years
  • May 1995 – May 2003: 17 years
  • After June 2003: 20 years

How long to wait to cash Series EE bonds

While you can’t cash Series EE bonds within a year, you can redeem them any time after that. Pendergast points out that the longer you hold your bond, the more likely you are to benefit from it. Just remember, he says, that you’re only guaranteed to see double the face value when you hold the bond until maturity.

You can receive years of “extra” interest by holding the bond beyond the maturity date, but once 30 years have passed, you won’t accrue any extra interest.

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. But once 30 years have passed, it’s a good idea to cash them in because you won’t get any extra benefit.

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.

However, know that if you redeem the bond before five years pass, there’s a penalty: you lose the last three months of interest you earned. So, for example, if you cash in a Series EE bond after 2 years, you’ll get to keep the first 21 months of interest.

Interest accrual and compounding on Series EE bonds

Series EE bonds issued since May 2005 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.S. Treasury offers a savings bond calculator that can help you figure out what you’ve earned — and what your bond is worth today.

Are Series EE Savings bonds a good investment?

A Series EE Savings bond could be a good investment if you’re looking for something that’s long term and low risk, since it’s backed by the Treasury and is guaranteed to double its value in 20 years.

However, 20 years to see only two times your initial investment might not help you meet certain goals. “Other vehicles like a 529 savings plan for education or even certain mutual funds offer greater returns with only slightly more risk,” Pendergast says.

Series EE Savings bonds also aren’t a good idea if you’re looking for something with liquidity. They’re not accessible unless you redeem the full value of the bond, and are required to be held for at least a year. For a more liquid (but still low-risk) investment, consider opening a high-yield savings account — many of these accounts are paying rates much higher than the rates on savings bonds.

Carefully consider what you plan to use the money for and its place in your portfolio. If you want a cash component and aren’t concerned about immediate liquidity, Series EE bonds might be the right choice. However, if you’re looking for growth, adding other assets to your portfolio can make sense.

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