The time it takes a savings bond to reach face (par) value depends on the series of bond and the value at which it was sold. There are presently three different series of U.S. savings bonds. Series EE and Series I are intended to be savings bonds, and Series HH is intended to be an investment bond.
In general, though, a savings bond is sold as a zero-coupon bond at a discount, and will reach its full value at its maturity. Therefore, savings bonds mature to their full face value.
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.
When Do Savings Bonds Mature?
U.S. Savings Bonds mature after 20 or 30 years, depending on the type of bond:
- Series EE bonds mature after 20 years. They are sold at half their face value and are worth their full value at maturity.
- Series I bonds are sold at face value and mature after 30 years. Interest is added monthly to the bond's value.
- Series HH bonds mature in 20 years. Bondholders receive monthly interest payments until they sell the bond or it reaches its maturity.
A Brief History of U.S. Savings Bonds
In 1935, during theGreat Depression, President Franklin D. Roosevelt signed legislation that allowed theU.S. Department of the Treasuryto issue federally backed savings bonds, Series A. In 1941, the Series E bond was first issued to help finance World War IIand were called Defensive Bonds. After the attack on Pearl Harbor, they were called War Savings Bonds, and the money invested in them went directly towardthe war effort.
After the war ended, Americans were encouraged to purchase savings bonds, which provided a way for individuals and families to earn returns on their investments while enjoying the absolute guarantee of the United States government.
Series EE Bonds
Series EE bondsmature after 20 years, meaning they can earn interest for that period of time. EE bonds are sold for half of the face value, and the U.S. Treasury Department guarantees that they will reach face value after 20 years. If the interest payments don't cause the bond to reach full face value at the end of 20 years, the government will do a one-time adjustment to bring the bond's value to equal face value.
It's important to keep in mind, however, that EE bonds must be owned for at least one year before redemption. If they are redeemed before five years, the last three months' worth of interest is forfeited, but after five years, they can be redeemed with no penalty. The annual interest rate for EE bondsissued from Nov. 1, 2018, to April 30, 2019, is0.10%.
Series EE savings bonds originated as Series E war bonds during the WWII era to help fund the war effort.
Series I Bonds
Series I bondsare sold at face value and mature after 30 years. Redemption rules are the same with Series I bonds as Series EE bonds.The composite rate for Series I bonds issued fromNov.1, 2019, throughApril 30, 2020, is2.22%. This rate applies for the first six months that you own the bond.
Series HH Bonds
Series HH bondsare also sold at face value, with bondholders receiving interest payments through direct deposit every six months for the 20-year life of the bond. As of Jan. 2003, HH bonds have earned an interest rate of 1.5%. HH bonds have not been available for purchase since Aug. 2004, but bondholders will continue to receive interest payments until the bonds'maturity.
FAQs
You are guaranteed that your bond will be worth at least face value at 17 years. If the interest rates have been too low for your bond to accrue enough interest to be worth face value at 17 years, Treasury will make a one-time adjustment to increase the redemption value to face value at that time.
How long does it take for a savings bond to reach face value? ›
Series EE bonds issued today will mature in 20 years, and they are guaranteed to double in value over that time. You can let the bond continue to accumulate interest for an additional 10 years after maturity.
How long does it take to get money for savings bonds? ›
When you cash your bonds online, the cash generally transfers to your checking or savings account within two business days of the request.
What is the face amount on a savings bond? ›
Face value is the amount of money promised to the bondholder upon the bond's maturity. By contrast, a bond's market value is how much someone will pay for the bond on the free market. Face value is predetermined when the bond is sold; market value takes into account multiple outside factors.
How long does it take to see interest on I bonds? ›
I savings bonds earn interest monthly. Interest is compounded semiannually, meaning that every 6 months we apply the bond's interest rate to a new principal value. The new principal is the sum of the prior principal and the interest earned in the previous 6 months.
Do you get the face value of a bond? ›
Each bond comes with a set term that typically ranges from 1 to 10 years or more. The face value of each bond, also referred to as the par value or redemption value, is set by the issuer and typically printed on the bond itself. It represents the amount the issuer promises to pay once the bond reaches maturity.
What happens when bonds are issued at face value? ›
Bonds are issued at par when they are sold for their face value. This means that if a firm were to issue $3 million in bonds with a 10% interest rate, it would receive $3 million and pay back the amount in future interest payments.
How much is a $100 EE savings bond worth after 30 years? ›
How to get the most value from your savings bonds
| Face Value | Purchase Amount | 30-Year Value (Purchased May 1990) |
|---|
| $50 Bond | $100 | $207.36 |
| $100 Bond | $200 | $414.72 |
| $500 Bond | $400 | $1,036.80 |
| $1,000 Bond | $800 | $2,073.60 |
Savings Bond purchases are generally issued to your TreasuryDirect account within one business day of the purchase date. If you select a non-business day as your purchase date, we will change it to the next available business day.
How long does it take for a $100 EE savings bond to mature? ›
All Series EE bonds reach final maturity 30 years from issue. Series EE savings bonds purchased from May 1995 through April 1997 increase in value every six months.
There are two primary reasons a bond might be worth less than its listed face value. A savings bond, for example, is sold at a discount to its face value and steadily appreciates in price as the bond approaches its maturity date. Upon maturity, the bond is redeemed for the full face value.
Why is my EE bond worth less than face value? ›
Paper Series EE bonds were sold at half their face value. For example, if you own a $50 bond, you paid $25 for it. The bond isn't worth its face value until it matures.
Can a savings bond lose value? ›
If a bond is held past its maturity, the federal government remains responsible for the debt. However, savings bonds that are held past their maturity date do not continue to earn interest and may actually lose value due to inflation.
Do all EE bonds double in 20 years? ›
We guarantee that the value of your new EE bond at 20 years will be double what you paid for it. (If you have an EE bond from before May 2005, it may be earning interest at a variable rate. See more at EE bonds.) We guarantee that the interest rate of an I bond will never fall below zero.
Why is my series I savings bond not showing interest? ›
If you check your bond's value at TreasuryDirect.gov within the first five years of owning it, the amount you'll see will have the three-month penalty subtracted from it. Consequently, when you buy a new bond, interest does not show until the first day of the fourth month following the issue month.
What is the penalty for not cashing matured savings bonds? ›
While the Treasury will not penalize you for holding a U.S. Savings Bond past its date of maturity, the Internal Revenue Service will. Interest accumulated over the life of a U.S. Savings Bond must be reported on your 1040 form for the tax year in which you redeem the bond or it reaches final maturity.
How much is a $50 savings bond worth after 30 years? ›
How to get the most value from your savings bonds
| Face Value | Purchase Amount | 30-Year Value (Purchased May 1990) |
|---|
| $50 Bond | $100 | $207.36 |
| $100 Bond | $200 | $414.72 |
| $500 Bond | $400 | $1,036.80 |
| $1,000 Bond | $800 | $2,073.60 |
Key points. Series EE bonds mature in 20 years but earn interest for up to 30 years. The U.S. Treasury guarantees Series EE bonds will double in value in 20 years. You don't receive the interest on your Series EE bond until you cash it.
How much is an EE bond worth after 20 years? ›
We guarantee that the value of your new EE bond at 20 years will be double what you paid for it.
