One of the safest investments is a series of EE savings bonds issued by the U.S. government.
“These are the most common types of bonds, and they are purchased at a discount and carry monthly interest,” said Paul Sundin, CPA and financial advisor at Emparion. “These bonds mature in 20 years, when the U.S. Treasury guarantees investors’ Funding has doubled.”
While savings bonds have low yields, few investments are guaranteed to double your money—and that takes 20 years. Generally speaking, interest rates on EE series savings bonds are generally higher than in high-yield savings accounts, but funds in savings accounts are more readily available.
If you have an EE series savings bond, it pays to know the current value before deciding to call it, as waiting longer can earn you more interest in some cases.
Check the current value of your savings certificate
Paper savings bond
The U.S. Treasury Department stopped issuing most paper savings bonds in 2012, but they never expire and have no redemption period. You will no longer earn interest on maturity. The value of paper savings bonds can be verified by using the savings bond calculator on the TreasuryDirect website and entering the following information, which can be found on securities:
- Issue date
- Bond series
- Face value
After you enter this information, the calculator will tell you the value of the paper bond when you call it today. You can also use a calculator to find out the bond’s value on another date. The TreasuryDirect website also allows you to enter information from multiple bonds to create a list and determine the total value, and save the list for reference.
Electronic Savings Certificate
Most savings certificates can now only be purchased electronically. If you have electronic bonds, you can log into your TreasuryDirect account (which was originally used to purchase bonds) and view the value in your account information under the Current Holding tab.
How do I redeem my savings voucher?
When you decide to cash in your EE Series Certificate of Savings, the process is fairly simple.
- Electronic Savings Bonds: If you have purchased bonds through TreasuryDirect, you can redeem them on this website. After logging into your account, you will find information on how to redeem the bond. The money will be transferred directly to a checking or savings account within two business days.
- Paper savings bonds: If your bank redeems paper savings bonds, you can take your paper savings bonds to a branch to redeem them. You can also redeem the paper bond by mailing it with the FS Form 1522 to the U.S. Treasury Retail Securities Service.
Early redemption of bonds
EE Series Savings Bonds are callable one year after purchase, but you won’t see the same return if you call the bond before the 20-year maturity. Bondholders are guaranteed to receive double the face value only by holding the bond until maturity.
“The only time the Treasury Department waives the one-year rule is when you have a disaster and need to get your money back as soon as possible,” said Sandin, a financial adviser.
Also, if you repay before the fifth year, the last three months of interest will be forfeited, which can significantly reduce the overall value of your savings bond. For this reason, Sundin cautions against buying savings bonds unless you have a specific purpose in your portfolio.
Another feature of EE Series Savings Bonds is that you can keep them beyond their maturity. Bondholders can earn interest for up to 30 years, and the longer they hold the bond, the higher the value of the bond.
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