Cash in Series EE Savings Bonds

Many young people get Series EE savings bonds as gifts to help them save for college, weddings, and other future expenses. This is very attractive to gift givers, because they cost only half of their face value in paper form. They are granted in 30-year terms, but can be cashed in at almost any point in their lifespan.


  1. Know the different interest rates of EE savings bonds. Knowing the value of EE savings bonds will help you decide whether it's a good idea (i.e. it makes financial sense) to cash in your bonds. Depending on the year issued, EE savings bonds have different interest rates.
    • Bonds bought before May 1997 earn different interest rates, depending on when they were bought.[1]
    • Bonds bought between May 1997 and April 2005 earn a variable interest rate, meaning their interest rate changes. It changes every six months, and it's 90% of the average five-year Treasury yield for the previous six months.[1][2]
    • Bond bought between May 2005 and the end of 2006 earn between 3.2 percent and 3.7 percent, and will continue to do so for as long as you own them.[2]
  2. Know that you cannot redeem an EE savings bond for a year after it was purchased. Whether you purchased the bond yourself or were given the bond as a gift, it cannot be redeemed until a year after its purchase.[3]
  3. If you choose to redeem an EE savings bond before it's five years old, know that certain penalties apply. EE savings bonds were meant to be long-term investments. Cashing in an EE bond before it's five years old comes with it forfeiture of the last three months of interest payments.[3]
  4. Wait at least twenty years for the best investment. EE savings bonds double in value at the 20 year mark, meaning that if you want to get the best bang for your buck, wait until the bond has reached its 20 year maturity.
    • Say you have a bond worth $100 and an interest rate of .20%. After 20 years, the bond reaches a maturity value of $200, even though the nominal value of the loan, given the interest rate, would normally be $105. After the adjustment, and until the loan hits 30 years old, it will earn a fixed interest rate.
    • Regardless of the interest rate on your current EE savings bond, waiting 20 years before cashing in the bond will guarantee you an effective yield of about 3.5 percent.[2]
  5. Cash in any EE savings bond that is older than 30 years old. EE savings bonds only earn interest for 30 years; if you happen to be sitting on a bond that is older than 30 years, it doesn't make much sense to keep it invested in an interest-less bond, so cash it in.
  6. Cash in your electronic bonds and paper bonds differently. Electronic bonds can be redeemed online and credited directly to a checking account within 1 or 2 days. Paper bonds can be redeemed at participating banks. Check with your local bank to see if they redeem EE savings bonds.
    • Note that the policies about redeeming bonds less than and greater than $1,000 in person may differ. Paper bonds greater than $1,000 may require a certifying officer to be with you when you cash in the bond.
  7. Be prepared to pay taxes on your EE savings bond. You have the option of deferring taxes until you cash the bond in, or paying taxes when the bond matures — whichever comes first. If you do not wish to defer taxes, you may pay them at the end of the year.
    • If you wish to factor in an education tax credit, it's best to defer taxes until you cash the bond in.[2]


  • If you simply want to know the current value of your bond, you can use the U.S. Government's Treasury website. You are also able to check what the value will be at a future date; just change the "Value As Of" field.
  • Keep in mind that you will not receive the best value for your bond if you cash it in before it's full maturity date, which is exactly 30 years after the date of issue. However, it may be to your advantage to transfer the money into a higher interest savings account or CD, if one is available.
  • If you have multiple bonds, you can download a tracking wizard from the same website which can tell you other statistics about your individual bonds.


  • Newer bonds have a waiting period before cashing, usually around 4 or 5 years. There is a penalty for withdrawing early as well: 3 months of interest may be deducted.
  • If your calculator findings indicate that your bonds are actually worth less than face value, do not be alarmed. Maturity dates for bonds can be anywhere from 7 or 8 to as many as 20 years, depending on the year of issue.
  • You may have to report your interest earnings to the IRS. Check with your tax professional to see if this applies to you.

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