Savings Bond advice
Tuesday, November 23rd, 2004
Categorized as: Series EE US Savings Bonds
We have series EE savings bonds dating back to 1983. Are they still drawing interest? If so, what is the rate and how often is interest paid? What advice do you have for these bonds? Can they just be left to continue earning interest as they are or what do you suggest to get the most benefit from them?
Tom's response
Bonds issued in 1983 will earn interest until 2013. Whether you should keep them or cash them is a complex question - it depends on what other assets and liabilities you have and what your investment strategy is.
You might consider consulting a competent fee-based financial advisor (avoid advisors who don't charge fees - they get paid by earning commissions on products that may not be best for you).
Savings Bonds are an excellent choice for the low risk portion of an investment portfolio. Most advisors recommend socking away at least 6 months worth of income in low-risk investments.
(Average rating: 4 stars)
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I have 5 $100 face value EE bonds ranging in issue date from 10/95 to 10/97. I want to get the most vlue I can from them but I also would like to redeem at least a few of them soon (either now or within the next few years). If I were to redeem them sometime in the next year or so, what date/period would you recommend for highest value?
Shannon - The 10/95 bonds should be redeemed as close to October 1 or April 1 as possible. Because of a rule change in May 1997, you can redeem the 10/97 bonds near the first day of any month.
There are pros and cons both ways as to which ones you should cash first, but the difference at your investment level is tiny, so don't worry about it.
Tom Adams
Can EE savings bonds be rolled into another type of bond after maturity? I have been reading different statements on these bonds. We have series E and also some series EE bonds from the mid 80's. Do they stop earning interest at maturity or do they keep earning itnerest until you cash them?
Mary - There are no rollovers. Savings Bonds earn interest for 30 years then become stinker bonds. The government is happy if you don't cash them, but you owe income tax on the interest and it's a financial mistake not to cash them, hold back what you need for taxes and reinvest what's left.
Tom Adams
I have a 1986 $500 EE Savings bond–what is it's value today? Should I hold it longer or cash and reinvest?
Rey - there's a calculator at the top of this page - right side - where you can look up the current redemption value of any Savings Bond. You'll get the best returns if you hold it for the full 30 years that it pays interest.
Tom Adams
I have monthly $200 EE bonds with issue dates 05/2001 - 12/2004. I'm confused as to when to actually cash them in (some people have said to cash them in after 5 years, and other have said to cash them in right before the maturity date). I want the maximum value I can get from the bonds. When should I cash in the bonds?
Ken - Savings Bonds pay interest for 30 years, so if you don't need the money, there's no reason to start cashing them until 2031. The best time to cash them is right after they stop paying interest, not right before they stop paying interest.
Tom Adams