- Value Savings bonds Online right now!
Q: When is the best time to cash
in a bond?
- A: Did you ever hear the stock market
expression, "Buy Low, Sell High"? If you own savings bonds you need to remember
The Bond Consultants phrase, "Buy Late ...Sell Early" (As in early and
late dates in a month). The reasons? Bonds earn interest from the first day of the month.
So if you are planning on selling your bond, you probably would want to sell it on the
first day that interest has been posted (or in which interest accrues), since you will not
collect any more interest on that bond for the rest of the month. If you are planning on
buying a bond, buy it late since you will earn the same amount of interest on a bond that
was purchased on the first day of the month.
- How You Can Lose Up To Six Months Worth of
- If you own bonds that were issued up to
April 30, 1997, interest is only posted every six months. If you cash in one day
premature, you could forfeit up to six months worth of interest. For example, if your bond
was due to post interest on September 1, and you cashed it in on August 31, you would have
lost the last six months worth of interest.
- $150 Million Worth of Interest Is Lost on
Savings Bonds Every Year!
How do I earn every dollar on my investment?
- That is one the most overlooked issues
by bond owners - who lose millions of dollars worth of interest every year because they
cash in their bonds at the wrong time. Dont be a victim. All of The Bond
Consultants Products and
Services indicate the date of the next interest
posting for every bond in your portfolio. Whether you have one or one thousand bonds, by
knowing the right dates, you will maximize your bond investments!
Q: What interest rate is used to calculate what bonds are worth?
- A: The answer depends on when you purchased
the bond. For clarification purposes, we have broken down the rules which applies based on
the date issued (which appears on the front of the bond):
- PRIOR TO NOVEMBER 1982: Bonds issued up to November 30, 1965, earn interest for up to
40 years. Any bonds issued in December 1965, or later, will earn interest for up to 30
years. If the bond (as well as savings notes) are still earning interest, it is based on
the guaranteed minimum investment yields, or market based investment yields. The rates are
both being calculated by the Treasury, then they best overall return is used.
- NOVEMBER 1982 through APRIL 1995: Bonds issued prior to March 1993 are earning guaranteed rates
which have increased gradually during the initial five year period of issuance. Bonds
issued from March 1993, through April 1995 earn a 4% guaranteed interest rate for the
first five years. When this bond goes beyond five years old, it earns interest based on
market based investment yields, or guaranteed minimum interest yields. The Treasury will
calculate the value of the bond based on these two elements, and give you the best overall
- MAY 1995 THROUGH APRIL 1997: Bonds will earn interest based on market yields for Treasury
Securities, through the original maturity period, or 17 years. Interest is posted to your
bonds every six months based on the rates indicated below.
- You will earn interest based on short
term rates for the first five years of the average of six month Treasury yields, which
is determined by the three months prior to May 1 and November 1 of each year.
- From the fifth to the seventeenth year, the
bond will earn the long term interest rate which is 85% of the average five year Treasury
Security yields over the six months prior to May 1 and November 1)
- MAY 1997 AND AFTER: EE bonds issued on May 1, 1997, and after, will earn interest
based on 90% of the average yields on 5 year Treasury Securities for the preceding six
months. The bonds will increase in value every month. The interest is compounded
semi-annually and the rate will be posted to the bond for the 6 month earning period.
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