How Much Is a $100 Savings Bond Worth After 30 Years?

U.S. Treasury savings bonds are a long-term savings option backed by the federal government. They grow in value through interest, offering a secure way to save money. Their worth depends on factors like the bond type, issue date, and how interest is applied.

Understanding How Savings Bonds Gain Value

Savings bonds accrue value through interest, with two primary types available: Series EE bonds and Series I bonds. Each type has distinct characteristics regarding how interest is earned.

Series EE bonds are typically purchased at half their face value; a $100 bond would cost $50. These bonds earn interest monthly, compounded semi-annually. EE bonds are guaranteed to at least double in value over 20 years from their issue date and continue to earn interest for a total of 30 years.

Series I bonds are purchased at their face value. Their interest rate combines a fixed rate with a variable inflation rate. This inflation rate adjusts every six months based on changes in the Consumer Price Index for All Urban Consumers (CPI-U), providing protection against inflation. Like EE bonds, I bonds continue to earn interest for a maximum period of 30 years.

Key Factors Affecting a Bond’s Final Value

The final worth of a savings bond after 30 years is influenced by its issue date and the interest rates applied. The issue date determines the specific interest rates applied throughout its life. For EE bonds, this date locks in the fixed rate for the first 20 years and marks the beginning of the 30-year interest-earning period.

Applicable interest rates are a primary determinant of value. EE bonds issued since May 2005 earn a fixed rate set at purchase, which applies for their first 20 years. The U.S. Treasury guarantees these bonds will double in value by the 20-year mark. For I bonds, the variable inflation component, which adjusts semi-annually, can significantly impact their growth over decades, reacting to economic conditions.

The final maturity date is when a savings bond stops earning interest. Both Series EE and Series I bonds cease accruing interest 30 years from their issue date. Holding a bond beyond this period means it will no longer increase in value.

Determining the Current or Future Value

To determine a savings bond’s value, bondholders need to access tools provided by the U.S. Treasury. This requires the bond’s series (EE or I), its denomination, and its issue date, typically found on the bond certificate or within a TreasuryDirect account.

For electronic savings bonds in a TreasuryDirect account, checking the value is straightforward. Bondholders log into their TreasuryDirect account, where the current value of their holdings is displayed under the “Current Holdings” section. This online platform provides updates on the bond’s accrued interest and total worth.

For paper savings bonds, the TreasuryDirect website offers a Savings Bond Calculator. Users input the bond’s series, denomination, and issue date. The calculator then applies relevant interest rates and compounding formulas to provide an accurate valuation.

Maturity and Redemption

When a savings bond reaches its 30-year maturity, it stops earning interest. Bondholders should consider redeeming it or reinvesting the funds into new savings vehicles. Holding a bond past its maturity date means it will no longer generate additional earnings.

Electronic bonds in a TreasuryDirect account can be redeemed online through the “ManageDirect” section by selecting “Redeem securities.” Paper bonds can be redeemed at a local financial institution or by mail using FS Form 1522, which requires bond details and identification. A penalty of three months’ interest applies if any bond is redeemed less than five years after its issue date.

Interest earned on savings bonds is subject to federal income tax but is generally exempt from state and local income taxes. Bondholders have the option to defer reporting this interest until the bond is redeemed or reaches final maturity. Under specific conditions, interest from Series EE and I bonds issued after 1989 may be excluded from federal income tax if proceeds pay for qualified higher education expenses, such as tuition and fees. Income limitations and other requirements apply to this education tax exclusion.