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.
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.
U.S. Savings Bonds mature after 20 or 30 years, depending on the type of bond: Series EE bonds
Series EE bonds
Series EE Bonds are interest-bearing U.S. government savings bonds guaranteed to at least double in value over their typical 20-year initial terms. Some Series EE bonds pay interest beyond the original maturity date, up to 30 years from issuance.
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.
If you purchase a Series EE bond today, you are guaranteed to earn a fixed interest rate for 20 years, which is when the bond matures. At 20 years, the government ensures that you will be paid double the face value of the bond.
They're available to be cashed in after a single year, though there's a penalty for cashing them in within the first five years. Otherwise, you can keep savings bonds until they fully mature, which is generally 30 years.
Cashing a Series HH savings bond where you are named on the bond and you send it in requires at least 3 months of processing time. All other requests may require 6 months or more to process. The annual purchase limit for Series I savings bonds in TreasuryDirect is $10,000.
Series EE savings bonds are a low-risk way to save money. They earn interest regularly for 30 years (or until you cash them if you do that before 30 years). For EE bonds you buy now, we guarantee that the bond will double in value in 20 years, even if we have to add money at 20 years to make that happen.
How long should I wait to cash in a savings bond? It's a good idea to hang on to your bond for as long as possible, ideally until it matures, so you can take full advantage of compound and accrued interest.
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.
If you still have a paper EE bond, check the issue date. If that date is more than 30 years ago, it is no longer increasing in value and you may want to cash it. See Cashing EE and I savings bonds. To find out how much your paper EE savings bond is worth, use our Savings Bond Calculator.
Savings bond interest is exempt from state and local income tax. Savings bond interest is subject to federal income tax; however, taxation can be deferred until redemption, final maturity, or other taxable disposition, whichever occurs first.
Where do I cash in a savings bond? You can cash paper bonds at a bank or through the U.S. Department of the Treasury's TreasuryDirect website. Not all banks offer the service, and many only provide it if you are an account holder, according to a NerdWallet analysis of the 20 largest U.S. banks.
You can get your cash for an EE or I savings bond any time after you have owned it for 1 year. However, the longer you hold the bond, the more it earns for you (for up to 30 years for an EE or I bond). Also, if you cash in the bond in less than 5 years, you lose the last 3 months of interest.
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.
tool on IRS.gov to check the status of your bond purchase request or call 1-800-829-1954. If the IRS already processed the refund and placed the request for the bond, you should contact the Treasury Retail Securities Site at 1-800-553-2663.
Bonds with issue dates of February 2003 and later are eligible for redemption one year from the issue date. However, if a bond is cashed within the first five years after its issue date, interest earned during the three months prior to cashing will be forfeited.
The end of this term is known as the maturity date. At this point, the full face value of the bond is paid to investors. However, the face value is not the only return a bondholder will receive. You'll also receive interest payments, which are likewise established at the outset.
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