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

Savings bonds are a secure, long-term savings option backed by the U.S. Treasury. They are a loan from an individual to the government, which repays the principal with interest. Popular for their safety, they are often used for gifts or to save for future goals like education or retirement, offering a straightforward way to accumulate wealth with minimal risk.

Understanding Savings Bonds

Two primary types of savings bonds, Series EE and Series I, are currently issued by the U.S. Treasury. Both can be held for up to 30 years, and each has distinct characteristics influencing its long-term value.

Series EE bonds issued since May 2005 are purchased at face value. They are guaranteed to double in value after 20 years and accrue interest for 30 years from their issue date. Older paper Series EE bonds were often purchased at a discount.

Series I bonds are also issued at face value, but their interest rate structure differs. They have a composite interest rate combining a fixed rate with a variable rate tied to inflation. Like EE bonds, Series I bonds earn interest for up to 30 years. Both types are now primarily electronic via TreasuryDirect, though older paper bonds still exist. Electronic bonds offer advantages like security and easy online access to value information.

How Savings Bonds Earn Interest

Savings bonds earn interest through a consistent accrual process. For Series EE bonds, interest is applied at a fixed rate determined at issue. Interest compounds semi-annually, meaning earned interest is added to the principal every six months. For bonds issued since May 2005, the U.S. Treasury ensures the bond doubles in value within 20 years if the fixed rate doesn’t achieve this. Interest accrues for 30 years from the issue date.

Series I bonds use a composite interest rate to protect against inflation. This rate has two components: a fixed rate, constant throughout the bond’s life, and a variable inflation rate. The variable rate adjusts every six months based on changes in the Consumer Price Index for all Urban Consumers (CPI-U). Like EE bonds, Series I bond interest also compounds semi-annually.

Interest ceases to accrue for both bond types once the bond reaches 30 years from its issue date. For example, a bond issued in August 1995 would stop earning interest in August 2025. Bonds must be held for at least 12 months before redemption. A penalty applies if a bond is cashed within the first five years, resulting in the forfeiture of the last three months of accrued interest.

Finding Your Savings Bond’s Value

Determining a savings bond’s current value is a practical step. The most accurate method is the TreasuryDirect Bond Value Calculator, an online tool from the U.S. Treasury that provides the current redemption value for both paper and electronic bonds.

To use the calculator, you need specific bond information: the series (e.g., EE or I), denomination, serial number (for paper bonds), and exact issue date. Access the tool on the TreasuryDirect website under “Tools & Resources,” then select “TreasuryDirect Calculator.” Accurate input of these details is important for a precise valuation.

For electronic bonds in a TreasuryDirect account, the process is simpler. Bondholders log in, and the current value of their electronic holdings is displayed without needing to input individual bond details. Paper bonds require manual entry into the calculator. The calculator then displays the bond’s current redemption value, including the original purchase price plus accrued interest.

Redeeming Your Savings Bond

After determining a bond’s value, the next step is redemption. Electronic savings bonds in a TreasuryDirect account offer a streamlined method. Bondholders log in, select bonds to redeem, and choose their preferred option. Funds are typically deposited into a linked bank account within two business days. A minimum redemption of $25 is generally required for electronic bonds.

Redeeming paper savings bonds offers a few options. Many financial institutions, like banks and credit unions, can process redemptions for customers. When redeeming, you generally need valid government-issued photo identification and a properly signed bond. Some institutions may limit the number or total value of bonds redeemed in a single transaction.

Alternatively, paper bonds can be redeemed by mail through TreasuryDirect. This may require submitting specific forms, like FS Form 1522, if the bond lacks a signature or under other circumstances.

Upon redemption, accrued interest is subject to federal income tax in the year the bond is redeemed or reaches final maturity, whichever comes first. This interest is exempt from state and local income taxes. Federal income tax on savings bond interest can be deferred until redemption or final maturity. Under specific conditions, interest used for qualified higher education expenses may also be exempt from federal income tax.