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# The Value of Savings Bonds

Understanding how much your governement-issued bonds are worth can be confusing. Here's help.

I'm wondering why, if EE bonds mature in 30 years, the Web site for the Treasury bonds mentions penalties for cashing in before five years? What happens at five years? Are the bonds face value? Or would I just get the interest plus what I paid for the bond at the time? For example, if I paid \$50 for an EE bond whose face value is \$100, what do I get after five years?

Your bond would be worth \$50 plus interest if you cashed it in after five years. The specific amount you would have after five years would depend on the interest rate when you purchased the bond. The bonds are designed to reach face value after 20 years (or the government makes up the difference if they don't).

Interest is added to the bond monthly and paid when you cash in the bond. If you cash in during the first five years, you'll have to forfeit the last three-months' interest as a penalty. Otherwise, the bond continues to earn interest for 30 years.

If you bought an EE bond in May 2005 or later, the bond earns a fixed rate of return. For example, EE bonds purchased in November 2006 earn a fixed rate of 3.60% for the next 20 years. The bond continues to earn interest for 30 years, but the rate can change after 20 years.