When Do Series E Savings Bonds Mature?
U.S. Savings Bonds are one of the safest investments available to individual investors because they're backed by the full faith and credit of the United States government. These bonds are issued by the Treasury Department and represent a debt of the federal government. Series E Savings Bonds were one of the most popular of all U.S. Savings Bonds.
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History
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The U.S. Department of the Treasury began issuing savings bonds in small denominations in 1935 to provide individual investors with limited resources the opportunity to participate in government finance. Series A, B, C and D Savings Bonds were sold at a 25 percent discount from face value and matured at face value after 10 years. The last of these bonds were issued in April 1941 and matured in April 1951. Series E Savings Bonds were issued by the U.S. Department of the Treasury beginning in May 1941.
Identification
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The first Series E Savings Bonds were dubbed Defense Bonds and later were referred to as War Bonds once the U.S. officially entered World War II. These bonds were originally issued as a means of financing the defense and war effort. During the war years, the bonds were actively promoted by banks, businesses, newspapers and volunteers. These promotional efforts gave rise to the payroll savings plan that allowed working people to establish a regular savings program through payroll deductions.
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Features
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Series E Savings Bonds, like earlier series of savings bonds, were sold at a 25 percent discount from face value and matured at full face value after 10 years, although they could be redeemed earlier. These bonds were sold in denominations ranging from $25 to $10,000. Where earlier savings bond series ceased earning interest upon reaching maturity, Series E Savings Bonds were granted an extension of their interest-bearing period for up to 40 years, depending upon the date of issue. According to the U.S. Department of the Treasury, all Series E Savings Bonds cease paying interest as of their maturity month in 2010.
Benefits
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Series E Savings Bonds accrued interest until redeemed or maturity in 2010. Investors earn a minimum rate of return, which may increase based upon market conditions. Interest is compounded on a semiannual basis, and the interest is earned on a tax-deferred basis until the bond is cashed, according to the U.S. Securities and Exchange Commission. Since Series E Savings Bonds are registered to the individual, they may be replaced if lost, destroyed or stolen. The interest earned on Series E Savings Bonds is exempt from state and local income taxes.
Considerations
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Series E Savings Bonds that were issued prior to November 1965 were granted three 10-year interest extensions, which allowed them to earn interest for up to 40 years. Series E Savings Bonds that were issued after November 1965 were granted two 10-year interest extensions, which allowed them to earn interest for up to 30 years. The U.S. Department of the Treasury ceased issuing Series E Savings Bonds in 1980. Individual investors may now purchase Series EE, Series HH or Series I Savings Bonds.
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References
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