How Much Is My U.S. Savings Bond Worth?

U.S. savings bonds represent a secure, low-risk investment issued by the U.S. Department of the Treasury, backed by the full faith and credit of the United States government. These debt securities allow individuals to lend money to the government, which in turn pays back the original amount plus interest over time. While savings bonds have evolved from physical paper certificates to predominantly electronic holdings, understanding their current worth remains a common objective for many bondholders. This article provides practical guidance and essential background information to help individuals determine the value of their savings bonds.

Key Information for Valuation

Before attempting to determine the value of a savings bond, it is necessary to gather specific information from the bond itself or from your TreasuryDirect account. The type of bond series is important, as it dictates how interest is calculated and how the bond matures. Common types include Series EE and Series I bonds, which are currently offered, along with older Series H and HH bonds that have since matured or ceased earning interest.

For both paper and electronic bonds, the issue date, reflecting the month and year the bond was purchased, is important. This date, typically found on the face of a physical bond, helps in calculating the exact period for interest accrual. The face denomination, or original purchase value, such as $50, $100, or $1,000, is also essential for valuation.

For electronic bonds purchased and held through TreasuryDirect, all necessary details are readily available within your online account. Logging into your TreasuryDirect account allows you to directly access information about your bond holdings, including the series, issue date, and current value. This centralized system simplifies the process of tracking your electronic bond investments.

Methods for Checking Value

Once you have gathered the necessary bond information, you can proceed to determine its current worth using official tools provided by the U.S. Treasury. The primary method for valuing paper savings bonds is the TreasuryDirect Bond Value Calculator. To use this online tool, you navigate to the TreasuryDirect website and access the calculator specifically designed for paper bonds.

Within the calculator, you will input the bond’s series, such as EE or I, and its original denomination. You must then enter the exact issue date, including the month and four-digit year, as printed on the bond. After entering these details, clicking “Calculate” will display the bond’s current value, including the total interest earned to date and the next scheduled interest accrual date. The calculator can also show values for past or future dates within its available range.

For electronic savings bonds, the process is even more streamlined. Holders of electronic bonds can simply log into their TreasuryDirect account, where the current value of their holdings is displayed directly within their portfolio or under the “Current Holdings” tab.

How Savings Bonds Earn Interest

Savings bonds accrue interest over time, contributing to their increasing value until they reach their final maturity. The method of interest calculation varies depending on the bond series. Series EE bonds, for instance, typically earn interest at a fixed rate set at the time of purchase and are guaranteed to at least double in value after 20 years, continuing to earn interest for a total of 30 years.

Series I bonds have a composite interest rate that adjusts every six months. This rate combines a fixed rate, which remains constant for the bond’s life, with a variable inflation rate based on changes in the Consumer Price Index (CPI). Like EE bonds, Series I bonds accrue interest monthly and compound semiannually, but their overall rate fluctuates.

All savings bonds have a specific maturity date, after which they stop earning interest. For Series EE and I bonds, this final maturity is generally 30 years from their issue date. Federal income tax on the interest earned is typically not due until the bond is redeemed or reaches final maturity.

Redeeming Your Savings Bond

When you decide to cash in your savings bond, there are specific requirements and procedures to follow. Generally, a savings bond must be held for at least one year from its issue date before it can be redeemed. Redeeming a bond before five years of ownership typically results in a penalty, where you forfeit the last three months of interest earned. After five years, you can redeem the bond without this penalty.

For electronic bonds held in a TreasuryDirect account, the redemption process is straightforward. You log into your account, navigate to the “ManageDirect” section, and select the option to redeem securities. You can choose to redeem the full value or a partial amount, provided at least $25 is redeemed and $25 remains in the bond. The funds are then directly deposited into your linked bank account, typically within two business days.

Redeeming physical paper bonds involves a different process. You can often present the bond, along with valid identification, at a local financial institution, such as a bank or credit union, that offers this service. If bank redemption is not possible, you may need to mail the bond directly to TreasuryDirect, often requiring FS Form 1522.

Upon redemption, the interest earned on your savings bond becomes taxable income in that year. This interest is subject to federal income tax, but it is generally exempt from state and local income taxes. You will receive a Form 1099-INT for tax reporting purposes.