A U.S. Savings Bond is a debt security that has been issued by the Department of the Treasury as a means of financing federal borrowing. Given the fact that U.S. Savings Bonds are backed by the credit of the federal government, these particular investments are considered to be one of the most secure and stable platforms for individuals seeking guaranteed yield. Generally speaking, a U.S. Savings Bond can earn interest for up to 30 years. In order to calculate the maturity date on a bond you own, you can consult directly with the TreasuryDirect service to learn more about the specific details of your investment.
U.S. Series EE Savings Bonds reach their full maturity date exactly 30 years after their date of purchase. With that in mind, you can calculate the maturity date on your bond by locating the original date of purchase and adding 30 years.
Series EE Savings Bond Basics
A Series EE Savings Bond provides the bondholder with up to 30 years of interest payments throughout the maturation of the investment. Depending upon the bondholder's specific interests, up to $10,000 worth of Series EE Bonds can be purchased on an annual basis. At minimum, an individual must invest at least $25 to receive a Series EE Savings Bond.
It is important to keep in mind that there is no rule regarding dollar increments and price points at which bonds can be purchased. For example, an individual can purchase a Series EE Savings Bond for $28.01 if they so desire. Once the bond has been purchased, the bondholder has the right to redeem the bond at any point beginning one year after the initial purchase.
Understanding Savings Bond Maturity Dates
As mentioned previously, a Series EE Savings Bond gains interest for up to 30 years. This means that the effective maturity date of the bond is exactly 30 years after the initial purchase. Although all Series EE Savings Bonds mature over a three-decade span, this does not mean that the rate at which interest is earned is identical for all bonds. Depending upon the specific date when the bond was purchased, the interest yield can fluctuate dramatically.
For example, a bond that has been purchased between the dates of May 1997 and April 2005 will feature a variable rate of interest that changes on a six-month basis. Bonds that have been issued beginning May 2005 feature a fixed rate of interest throughout their maturation. The specific rate of interest for the bond in question will be assigned at the time of purchase.
Keep in mind that, although bond rates do fluctuate depending upon a variety of economic factors, the rate of return for these particular investment tools will remain quite low. This is due to the fact that bonds represent a "guaranteed" return for investors and present little, if any, risk.
When to Redeem Your Bond
Series EE Savings Bonds must be held for at least a year before they can be redeemed for cash. If, however, a bondholder decides that they would like to cash in their bonds before they have held them for five years, they will lose three months of interest on the bond. For example, if an individual has held a bond for 36 months and then decides to redeem it for cash, they will only receive a payment equal to 33 months of interest.
Once the bond has been redeemed for cash, the bondholder will be responsible for paying relevant federal taxes. However, the bondholder will not be required to pay state income taxes on the money received from bond redemption, assuming state income taxes are applicable in their place of residence.
Redeeming Electronic Vs. Paper Bonds
The specific process for redeeming a Series EE Savings Bond will depend largely on the method used to purchase it. By far the most common method used today to acquire savings bonds is through TreasuryDirect's online portal. Here, individuals can quickly purchase electronic bonds, which are kept secure as part of a digital register and do not require paper certificates. In the event that an individual has purchased a Series EE Savings Bond online and has forgotten crucial details about the bond – such as when they purchased it or its date of maturity – they can retrieve this information quickly by accessing information stored in their online account.
If an individual has been saving paper bonds, redeeming these documents will require slightly more effort. Paper bondholders will have the option to either mail the bonds in themselves to the Treasury Retail Securities Services, or they can take them to the nearest branch of their preferred banking institution. Although exceptions will likely exist, the vast majority of banks will allow individuals to bring in paper bonds for redemption and receive cash.
Addressing Questions About Paper Bonds
In the event that you are unsure as to whether or not a paper bond is eligible for redemption, you should be able to gather this information by consulting with TreasuryDirect or a local bank branch. Either institution you consult with will need you to provide a copy of the specific serial number for the bond in question.
In some situations, you may not be able to access the savings bond serial number. For example, if you have lost the paper certificate for the bond, you may not have the information you need to begin the redemption process or learn more about the status of that bond.
In order to move forward with bond redemption, you will need to request an electronic duplicate of the bond by providing a variety of identifying information to the TreasuryDirect service. This information includes your Social Security number, the specific month and year in which the bond was purchased as well as your mailing address. With this information, representatives from TreasuryDirect should be able to retrieve your bond and further assist you in the process of redeeming it.
More Thoughts About Bond Redemption
If you have uncovered old savings bonds that either belonged to you or a loved one, you shouldn't automatically consider these documents to be ready for redemption. In some circumstances, you may have discovered a paper copy of a bond that has already been redeemed. With that in mind, it is critical that you take the time needed to research your bond and ensure that you have all of the relevant information regarding its issuance date and redemption status.
Again, this information can easily be provided by the TreasuryDirect service or a local bank branch. Any bonds that have been issued electronically using the TreasuryDirect online service will be permanently recorded in the federal database and easily accessible at any time via online account with the TreasuryDirect platform.
Ryan Cockerham is a nationally recognized author specializing in all things business and finance. His work has served the business, nonprofit and political community. Ryan's work has been featured on PocketSense, Zacks Investment Research, SFGate Home Guides, Bloomberg, HuffPost and more.