How Much Is a $50 Bond Worth After 30 Years?

U.S. Savings Bonds, particularly Series EE and Series I bonds, are debt securities popular for their accessibility and long-term growth potential. The specific value of a bond depends on several factors. This article guides readers through understanding, valuing, and ultimately redeeming their savings bonds.

Understanding U.S. Savings Bonds

U.S. Savings Bonds are debt securities issued by the United States Department of the Treasury, backed by the full faith and credit of the U.S. government. They are non-marketable, meaning they cannot be publicly traded or transferred. The two most common types purchased by individuals are Series EE and Series I bonds.

Series EE bonds historically were purchased at half their face value, meaning a $50 bond cost $25, though electronic EE bonds are now purchased at face value. These bonds are guaranteed to at least double in value over their initial 20-year term, and they continue to earn interest for a total of 30 years. Interest accrues monthly and compounds semiannually, which means earned interest becomes part of the principal for future interest calculations.

Series I bonds, introduced in 1998, are purchased at face value and are designed to protect against inflation. These bonds earn interest through a combination of a fixed rate set at purchase and a variable inflation rate adjusted every six months based on the Consumer Price Index. Both Series EE and Series I bonds earn interest for up to 30 years, after which they stop accruing interest. All accrued interest is paid out only when the bond is redeemed.

Determining Your Bond’s Current Value

The precise value of a U.S. Savings Bond depends on its specific issue date and the interest rates applied over its holding period. The primary tool for bondholders to determine their bond’s actual worth is the U.S. Treasury’s TreasuryDirect website and its Bond Value Calculator. This online resource provides an accurate calculation of the bond’s current value, including all accrued interest.

To use the online calculator for paper savings bonds, you will need to locate specific information printed on your bond. This includes the bond’s series (e.g., EE or I), its denomination, and the issue date, which is typically found in the upper right corner. The calculator does not require the bond’s serial number to determine its value, but it is necessary for creating and saving an inventory. Electronic bonds held in a TreasuryDirect account will display their current value automatically when you log in.

After entering the required details into the calculator, the system will provide the current redemption value. This value reflects the original purchase price plus all interest earned up to the calculation date. Note that the calculator for paper bonds will not provide correct values for electronic bonds; electronic bond values are accessible directly within your TreasuryDirect account.

Redeeming Your Savings Bond

Once a U.S. Savings Bond has reached its full maturity, typically 30 years, or if the holder wishes to redeem it earlier, established procedures are in place. Bonds stop earning interest after 30 years, making redemption a logical step to avoid losing value to inflation. A bond must be held for at least 12 months before it can be redeemed.

For electronic savings bonds, redemption is managed through your TreasuryDirect account. You can log in and use the “Redeem securities” option within the ManageDirect section to initiate the process. The funds are typically transferred to your linked bank account within two business days. Electronic bonds allow for partial redemption, provided at least $25 remains in the bond’s value.

Paper savings bonds can often be redeemed at many financial institutions, such as banks or credit unions. When cashing a paper bond in person, you will typically need to present the bond itself and provide valid identification, such as a driver’s license. If a bank does not offer this service or if you prefer to mail the bond, you can send it along with a completed FS Form 1522 to Treasury Retail Securities Services. Unlike electronic bonds, paper bonds must be cashed in their entirety.

Interest earned on U.S. Savings Bonds is subject to federal income tax, but it is exempt from state and local income taxes. Bondholders can choose to defer reporting the interest for tax purposes until the bond is redeemed or reaches final maturity. There is a penalty of three months’ interest if a bond is redeemed before it has been held for five years. In some cases, interest earned may be excluded from federal income tax if the bond proceeds are used to pay for qualified higher education expenses.