How long does it take for a $100 savings bond to mature?

These government-backed bonds take 30 years to reach maturity.

How much is a $200 savings bond worth after 20 years?

While the value of a $200 bond depends on the interest rate and whether it is a Series EE or Series I bond, you won't lose money on a savings bond – the minimum value after 20 years will be $200, and it should be worth more due to the interest.

How long does it take a $200 savings bond to mature?

While bonds reach their full maturity after 30 years, Series EE bonds are guaranteed to have doubled in value after 20 years.

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Savings Bonds: What Are They and How To Cash Them

July 14, 2024

7 min Read

Written by Sean Dennison

Edited by Emily Gadd

Closeup United States Treasury Savings Bonds Security Concept.

larryhw / Getty Images/iStockphoto

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Investing can be an overwhelming, possibly scary notion. If you want to set some money aside — and do so safely — you might not realize you have more options than just a standard savings or CD account. Savings bonds, for example, are not the flashiest investing option, but they can provide you with an extremely safe, government-backed way to earn tax-advantaged interest.

Key Takeaways

Interest: Bonds offer interest payments at a nominal rate.

Taxes: Interest is taxable, but it is deferred until you cash the bond or it has reached its maturity date. They are not subject to state or local taxes, only federal taxes.

Transferability: You can transfer bonds to another person at no charge as soon as five days after purchasing them.

Age Requirements: Minors can hold bonds in their own names.

Payroll Savings Plan: With a payroll savings account plan, you can deposit part of your paycheck directly to your Treasury account to automatically purchase savings bonds.

What Is a Savings Bond?

A savings bond is an investment instrument offered by the federal government through financial institutions. When you buy a savings bond, you loan money to the U.S. government in exchange for a return at a future date.

Essentially, savings bonds are debt securities that fund U.S. government spending. They are considered one of the safest investments because they are guaranteed by the federal government. Technically, you are loaning money directly to the government and then receiving a return on your investment through interest earned.

How Savings Bonds Work

The purchase price of savings bonds is the same as their face value. You pay $100 for a $100 savings bond, but the value of the bond increases over time.

Savings bonds come in two versions: Series EE and Series I.

Series EE: These bonds have a fixed interest rate for the life of the bond.
Series I: These bonds earn interest at a composite rate that can change semi-annually.

Series EE and Series I savings bonds earn interest for 30 years. The interest is added to the bond each month and compounds semi-annually.

Savings bonds are available in small denominations. Electronic bonds come with a face value between $25 and $10,000, and you can buy them down to the penny. For example, if you want to buy a Series EE bond for $76.49, you can. Series I bonds are available in multiples of $50, from $50 to $5,000, with face values of $50, $100, $200, $500, and $1,000. Face value, also known as par value, is the amount that will be paid when the bond matures, or comes due.

It’s important to note that paper Series I bonds are now only available by using your IRS tax refund.

Interest Earned on a Bond

Say, for example, you buy a Series EE bond for $100 that earns 2.70% interest per year, which was the rate from May 1 to Oct. 31, 2024. One month’s worth of interest is added to the $100 principal amount each month.

After six months, the bond is worth $101.35. It earns interest on this principal amount for the next six months, after which the interest compounds again. However, interest on savings bonds is not paid out when it is earned. Rather, it is compounded and paid out at either maturity or when an owner redeems the bonds.

How To Buy Bonds

To purchase a bond, you need a TreasuryDirect account, which also allows you to manage your bonds at your convenience. To find out exactly what your bonds are worth — or could be worth — check out the Savings Bond Calculator at TreasuryDirect. Most savings bonds these days are issued electronically, but you can still buy paper Series I bonds with your tax refund.

Types of Savings Bonds

Two types of savings bonds are available: Series EE bonds, which are traditional savings bonds, and Series I bonds, which carry an inflation-adjustment component.

Series EE U.S. Bond

You purchase Series EE savings bonds at face value, but the Treasury Department guarantees that the bonds will at least double in value after 20 years. These bonds continue to earn interest after that period, for up to 30 years in total.

Here are more details about Series EE savings bonds:

Face value: Minimum of $25, available in penny increments
Maximum available for purchase: $10,000
Interest terms: 2.70% annual fixed-rate for bonds purchased between May 1 and October 31, 2024
Holding period: Up to 30 years; no penalty for cashing bonds after 5 years

Series I U.S. Bond

Series I bonds are similar to Series EE bonds but carry both a fixed rate and an inflation-indexed component.

Face value: Minimum of $25, available in penny increments
Maximum available for purchase: $10,000
Interest terms: 4.28% composite rate for bonds purchased between May and October 2024, with the fixed component set at 1.30%
Holding period: Up to 30 years; no penalty for cashing bonds after 5 years

Pros and Cons of Savings Bonds

A savings bond’s security — the financial backing of the U.S. government — can be attractive to a cautious investor. These bonds do increase in value over time, and they remain popular as gifts. As with any investment, research your options and choose the one that best fits your financial goals. Even so, they may not be the best choice for all situations, so consider these pros and cons:

Pros of Savings Bonds

Low risk
Guaranteed returns
Protections against inflation
Earnings are taxed federally but are not subject to state or local income tax

Cons of Savings Bonds

Minimal returns
Slow growth

How To Cash in Bonds

You can cash in savings bonds at your local bank or through the U.S. Department of the Treasury. Here are two ways to cash them:

Paper Bonds: Present the bond and an acceptable form of identification to a bank. If you’re a beneficiary cashing the bond of a deceased person, you will also need a certified death certificate. Alternatively, you can complete FS Form 1522 and sign it at a bank for signature verification. Mail the form along with the unsigned bond to the U.S. Department of the Treasury.
Electronic Savings Bonds: Log in to TreasuryDirect. Follow the onscreen steps for cashing a bond.

Savings Bonds vs. Traditional Bonds

Savings bonds share some similarities with traditional bonds, but they are actually quite different. Here are some of the main differences:

Savings Bonds	Traditional Bonds
Interest is paid upon maturity or redemption	Interest is paid at regular intervals, typically semi-annually
Bonds cannot be sold without penalty for the first five years	Bonds can be sold on the open market at any time
Interest is not taxable at the state or local level	Interest is typically fully taxable
Bonds are backed by the federal government	Bonds are backed by the guarantee of individual issuers, who may encounter financial difficulty
Owners can extend maturity after 20 years at their discretion	Bonds mature on a specific date unless permitted to be called earlier by the issuer; owners have no control over the maturity date

Savings Bonds vs. Savings Accounts

Savings accounts are much more liquid than savings bonds. You can withdraw money from your savings account at any time, often at an ATM. A savings bond, on the other hand, requires a transactional sale that may incur penalties if you sell it within the first five years after purchase. Savings account rates are variable, vs. the fixed rates of savings bonds, but when rates trend high, they may pay a higher APY than savings bonds. Savings are not technically guaranteed by the U.S. government like savings bonds, but they do carry FDIC insurance of up to $250,000, and many financial firms provide supplemental insurance as well.

Final Take To GO

Though savings bonds are low risk, they often provide a low return. However, if you’re looking for a government-guaranteed investment that pays interest, you may find comfort in owning savings bonds. They can make a good slow-growth investment for children, risk-averse investors or those new to investing.

Caitlyn Moorhead and John Csiszar contributed to the reporting for this article.

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