Ask Mary Beth: Money Q & A

Could you please tell me the maturity time for Series EE Savings Bonds that were purchased in January 1991-1993. I bought them in $100 denominations. How much are they worth now?

Mary Beth answers:
Savings bonds carry three different maturities: original maturity, extended maturity, and final maturity. Series EE bonds earn interest for 30 years, but at different rates as described below.

Original maturity is the maximum amount of time it will take a bond to reach face value at the guaranteed interest rate. For example, Series EE bonds purchased between November 1986 and February 1993 have an original maturity of 12 years.

So the bonds that you purchased between 1991 and 1993 at half their face value--that is you paid $50 each for bonds that would be worth $100 at maturity--have not yet reached their face value.

After 12 years, your bond will reach its original maturity. After that, it enters an "extended maturity period" of ten years, when it will earn whatever the guaranteed interest rate is at that time (which can be lower than the original rate). At the end of that ten-year period, your bonds enter another extended maturity period of eight years--again earning the guaranteed interest rate at that time.

Once your series EE bonds reach their final maturity after 30 years, they will stop earning interest. Interest earned on savings bonds is subject to federal taxes, but is exempt from state and local taxes. Taxes are usually due when the bond is cashed or reaches final maturity.

All bonds purchased prior to March 1, 1993, increase in value twice a year. Cashing in a bond even one day before an interest increase can result in your missing out on six months' worth of interest.