Bond Reaches Original Maturity Guarantee
Thursday, July 1st, 2004
Categorized as: Yesterday's News (old post archive)
I have a $10,000 Series EE Savings Bond that was purchased in August 1992 that is currently paying 6% interest and matures in August 2004. Will this bond continue to pay 6% interest beyond the maturity date of August 2004 and if not, what would the new rate be?
Tom’s response
On August 1 this bond reaches its “original maturity guarantee”. This means that when you bought it the Treasury guaranteed it would reach face value in 12 years (for a bond you buy today, it’s 20 years!).
The good news is that it will actually be worth a little more than that – $10,164.
The bad news is that on August 1 the guaranteed rate will drop to 4% from the current 6%. Nonetheless, 4% is better than what you can get with a new Savings Bond and much better than comparable investments.
Series EE bonds don’t reach final maturity for 30 years – so this bond will pay interest until 2022, if you want to keep it that long.
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Tom Adams