How to Determine the Value of U.S. Savings Bonds

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Whether to invest in U.S. Savings Bonds is a decision that should be made on its merits: namely, what is the rate of return? In the long run, these bonds should perform better than Certificates of Deposit due to their inflation protection, but the short-term can be a totally different story. Also, the EE/E bond is confusingly sold at a "face value" that is higher than its purchase price. Studying these terms are essential to understanding the real value of U.S. Savings Bonds.

Study how the EE/E Bond works. EE Bonds are sold under normal circumstances when purchased electronically, but for a price worth half their face value if bought as paper certificates (see the Tips section below for more information). What that means is that the Treasury guarantees that the bonds will at least double in value by their maturity date, which since 2003 has been 20 years. Ergo, paying $100 for a paper EE/E bond means it will be worth at least $200 in 20 years, regardless of the interest, and it will continnue to earn interest for another 10 years after that.

Check the terms for an EE/E Bond. These bonds earn a rate of interest that is fixed at the time of purchase. So, if you bought the bond when the rate was set at 1.5 percent, it earns that for its entire life, compounded monthly.

Check the terms for an I Bond. I Bonds earn at a fixed rate plus the rate of inflation, which is adjusted on May 1st and November 1st. So, if the bond was purchased at 1.5 percent and the rate of inflation on May 1st was 3 percent, the bond would earn 4.5 percent for the next six months.

Use the TreasuryDirect website. Electronic bonds automatically show both their purchase value and current total value when they are examined individually. The website also offers a value calculator, which will determine the value of a bond if you know its type, date of purchase, and face value.

Tips & Warnings

  • In response to pressure from Congress, the Treasury began issuing paper EE Bonds as "Patriot War Bonds" shortly after the September 11th attacks. At that time, the only difference between an electronic EE Bond and a paper one was that the paper bond had the words "Patriot Bond" included in its design. Since then, the Treasury has been making a move towards all electronic securities, but they are also still required to live up to the terms of their proclamation regarding Series EE War Bonds. The result was a divergence between the terms for the electronic and paper versions of the Series EE bond.

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