Key points
- Series EE bonds mature in 20 years but earn interest for up to 30 years.
- The U.S. Treasury guarantees Series EE bonds will double in value in 20 years.
- You don’t receive the interest on your Series EE bond until you cash it.
Series EE bonds have been a low-risk way for Americans to save money since 1980. Many conservative investors enjoy the safety and predictability of these savings vehicles, which are backed by the full faith and credit of the U.S. government and come with a double-your-money guarantee. But they aren’t right for everyone.
“While Series EE bonds are considered long-term investments due to their extended maturity, there are limits and considerations that must be taken into account,” said Nicholas Yeomans, a certified financial planner and president of Yeomans Consulting Group. “One of the biggest considerations is that they may not keep up with inflation over time. This means that your purchasing power could erode.”
The rate on Series EE bonds issued from May 1, 2024, to Oct. 31, 2024, is 2.70%. Meanwhile, the consumer price index increased 3.50% in the 12 months through March 2024. That means any money you have in a Series EE bond at the current rate is effectively losing value every day.
Since the Federal Reserve started raising rates in early 2022, “Series EE bonds have become less attractive compared to bonds that can be purchased in the open market in any brokerage account,” said Russell Hackmann, a certified financial planner and president of Hackmann Wealth Partners. You can find higher rates on one-year certificates of deposit, which offer upward of 5%.
But Series EE bonds may have a place in your portfolio depending on what you’re looking for from your investments. You can purchase them for as little as $25 or as much as $10,000 and receive a fixed interest rate for 20 years. The government also offers a double-your-money guarantee when the bond matures that can be enticing for some savers.
How long does it take for a Series EE bond to mature?
“Series EE bonds have unique rules with regard to how their maturity and interest accrue,” Yeomans said.
How long it takes a Series EE bond to mature depends on when it was issued. Bonds issued in May 2005 or later have an initial maturity of 20 years, at which point the government guarantees you’ll receive double your initial investment.
You can hold your bond for another 10 years and still earn interest, however.
“Series EE bonds can be redeemed after the first year,” Yeomans said. But beware: You’ll forfeit the last three months of interest if you redeem a Series EE bond before five years.
Maturity dates for Series EE bonds
The time to initial maturity for Series EE bonds has varied historically, ranging from eight years in the early 1980s to 20 years today. Note that the times in the table below are for initial maturity. In all cases, the total interest-earning period is 30 years.
Series EE bond maturity periods
| ISSUE DATE | ORIGINAL MATURITY PERIOD |
|---|---|
January 1980 to October 1980 | 11 years |
November 1980 to April 1981 | Nine years |
May 1981 to October 1982 | Eight years |
November 1982 to October 1986 | 10 years |
November 1986 to February 1993 | 12 years |
March 1993 to April 1995 | 18 years |
May 1995 to May 2003 | 17 years |
June 2003 and later | 20 years |
What factors influence Series EE bond maturation?
If you define maturation as when a Series EE bond stops earning interest, time is the only factor influencing it. You will earn interest for 30 years after the bond’s issue date.
If you define maturation as when a Series EE bond doubles in value, the prevailing interest rate also plays a role. While the U.S. government guarantees that your bond will double in value in 20 years — even if it must add money to your account — a higher interest rate may enable your bond to double in value sooner.
You can use the Rule of 72 to determine approximately how long it will take your investment to double in value based on its fixed annual rate of return. To do so, divide 72 by the interest rate.
For example, new Series EE bonds earning a 2.70% interest rate will double in value in 26.67 years. So if you buy a new Series EE bond today, you’re likely to get extra money from the government in year 20.
Also keep taxes in mind when determining your bond’s value. Series EE bonds are not subject to state or local taxes. But you must pay federal income tax on the interest. You can pay the tax as interest accrues or all at once when you cash in the bond.
Not paying interest along the way can lead to a “big surprise” if you hold the bond for multiple decades, Yeomans said.
You may not owe taxes on the bond’s earnings if you use the money for higher education. Still, Yeomans said a 529 account could be a better choice for college savings.
How do Series EE bonds accrue interest?
While a Series EE bond accrues interest monthly, you won’t receive this income until you cash in the bond. The accrued interest is added to your principal twice a year.
The interest rate on Series EE bonds issued in May 2005 or later is fixed for the first 20 years. It can vary in the final 10 years. If the interest rate changes, the U.S. government will notify you before the 20th year so you can decide if you want to hold the bond or cash it in. After 30 years, the bond no longer earns interest.
The current rate on Series EE bonds is 2.70%. “Better rates are available on CDs or Treasury bonds purchased in the open market, whether short term or out as far as 30 years,” Hackmann said.
Frequently asked questions (FAQs)
You must wait at least 20 years to cash in your Series EE bond if you want it to double in value. While you can cash in your bond anytime after the first year, doing so before five years will cost you the last three months of interest.
A Series EE bond stops earning interest after 30 years. At this point, you’ll want to cash it in so you can reinvest your money elsewhere.
Series EE bonds stop paying interest after 30 years or when you cash them in if you do so before 30 years. You are guaranteed a fixed interest rate for the first 20 years on Series EE bonds issued in May 2005 or later. While the government may change the rate after 20 years, it will pay interest for 30 years or until you cash in the Series EE bond.
