Knowing Your U.S. Savings Bond Value

When you buy, it’s important to know what US savings bond value you are acquiring. As an investor, when you buy bonds or securities, as they are also known, you are lending the government money.

In return, the government makes the bond available to you either in paper form or in electronic form. No trading of such treasury securities is done but the bonds can be redeemed after a minimum of one year. There are no dividends paid either. The interest payments are simply added to the value of the bond. However, interest is a " tax deferred" item, meaning that you do not have to declare interest as part of your tax returns to the government until such time as you cash in your bonds.

The value of the savings bond will differ according to its type. The government has issued different series of bond over the years. Each series was typically designed to raise money in a certain way or for a certain reason. The US Treasury has typically issued savings bonds in alphabetical progression. It started with the series A bonds and continued through the alphabet up to the series E bonds, the longest running series so far (from May 1941 up until 1980). To the present day, we’ve seen series A, B, C, D, E, EE, F, G, H, HH, I, J and K. For any given bond or series, the value of the bond will also depend on the time at which you cash it in and the interest that has been building up.

The EE bonds that followed the E series can still be bought in different ways. You can buy them at half or full face value and for amounts between $50 and $10,000. US savings bond value here can be calculated at the maturity date that can be between eight and 30 years after date of issue. However, if you cash in such bonds before the fifth year then you will lose three months worth of interest. The EE bonds bought from a bank or other financial institution are also known as patriot bonds. The story behind this is that they were introduced after the events of the 11th of September for citizens not only to make savings but also show their patriotism.

We can calculate the value of the savings bonds by using the face value of the bond and the interest rate between the dates the bond was issued until today. We also need to deduct any penalties that may apply, for example if the bonds are redeemed earlier than planned. The important information is that a bond issued at half the face value will assume full face value at maturity, while the bond that was issued at face value will then be worth twice this amount at the time of maturity. Savings bonds will also appreciate in value if you can keep them past their maturity dates. In this case you would calculate the interest on a year-by-year basis to calculate the full US savings bond value.