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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FDIC Insured Certificates of Deposit can pay 1 or 2% more than savings bonds when held for a similar length of time. See top CD Rates Below:

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June 1, 2010

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Tom Adams

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