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Yahoo
26-02-2025
- Business
- Yahoo
How to find the value of a U.S. savings bond
Issued by the U.S. Treasury, savings bonds are relatively safe, long-term investments that mature 30 years after the original purchase date. For most of us, 30 years is a long time to hold a single investment. The value of your investment can also change considerably during that time. So if you're wondering what your savings bond is worth, there are simple methods for calculating the value; the one you use will depend on the type of bond you have. Read more: What are bonds, and how do you invest in them? This embedded content is not available in your region. The U.S. Treasury currently issues two types of bonds: Series EE bonds: These bonds earn interest monthly for 30 years. As long as you hold it for at least 20 years, the Treasury guarantees that a Series EE bond will double in value, regardless of the interest rate. Series I bonds: Intended as a hedge against inflation, these bonds also earn interest monthly for 30 years. Unlike Series EE bonds, however, the interest rate on Series I bonds is made up of two parts: A fixed rate, set at the time of purchase and remains the same for the bond's life. A variable rate, adjusted every six months based on inflation, measured by the Consumer Price Index for All Urban Consumers (CPI-U). Read more: I bond vs. high-yield savings account: Which is better for beating inflation? Both types of savings bonds are issued electronically through the official Treasury website. However, you can also get paper versions of I bonds if you use your federal tax refund to purchase them. Note that in the past, the Treasury issued other types of savings bonds, such as Series HH bonds, but has since retired them. These older bonds were originally issued in paper form but are no longer available for new purchases. Read more: Types of U.S. savings bonds and how they work Finding the value of an electronic savings bond is as simple as visiting the U.S. Treasury website: Once on the site, click 'log in,' then click 'next.' Then, enter your account number. You may be prompted to enter a one-time passcode (OTP), which TreasuryDirect will send to your email. If so, enter the code you receive in your email and submit, then do the same with your password. After logging in successfully, you will be in the My Account section. On that page, you will find a section called 'Current Holdings,' which shows the current value of all your holdings, including savings bonds. If you have more than one type of savings bond, you can see the value of each type by clicking the Current Holdings button in the menu at the top of the page. You will then see a separate holdings page, showing the value of your Series EE and Series I bonds. Unlike electronic savings bonds, paper bonds are not tracked via your online account. Since you can't quickly look the values up, you must calculate them manually. Fortunately, there is a paper savings bond calculator on the TreasuryDirect website that lets you quickly calculate the value of paper bonds. This calculator determines the value of a paper bond based on its series, issue date, and denomination. You can also enter the bond's serial number for later reference, though this step is optional. To calculate the value of a paper savings bond: Access the calculator on the TreasuryDirect website. Enter a date for which you'd like to know the bond's value. Enter the type of bond and dollar amount. Enter the serial number (optional, to track the bond later). Enter the issue date (month and year). Click calculate. Read more: How to cash a savings bond Two of the biggest factors affecting bond values are interest accrual and the bond's value doubling if you own Series EE bonds. Interest can be a big factor, particularly because savings bonds can earn compounding interest, where you can earn interest on top of the interest you earned previously. Because Series EE bonds have fixed interest rates and Series I bonds have variable rates, the amount of interest each type earns can vary significantly over 30 years. For instance, if you purchase a Series EE bond with a 2.5% interest rate, you may earn much less than you would with a Series I bond if interest rates increase over time. To illustrate this, we can compare a $1,000 Series EE bond issued in February 2001 to a Series I bond issued in the same month. The current value of the Series I bond as of Feb. 20, 2025, is $4,148.00, while the value of the Series EE bond is just $1,152.00. Series I bonds have a higher interest rate in that period, leading to a much larger increase in value. This can also have a significant impact on a bond's resale value. It is possible to sell savings bonds at any time on the open market. However, if you have Series EE savings bonds with a low interest rate and market interest rates increase, the value of your bond will decrease. This is because it earns less interest than newly-issued bonds. The value of a 30-year bond today depends on several factors, including the issue date, the bond type, and the dollar amount denomination. A $50 savings bond you purchased last year likely hasn't changed much in value. Conversely, a $5,000 bond you purchased 25 years ago may be worth much more than it was when you purchased it. Remember that you can quickly see the value of 30-year electronic bonds by logging into For old paper bonds, use the paper savings bond calculator on the TreasuryDirect website.
New York Times
31-01-2025
- Business
- New York Times
You Can No Longer Buy Paper Inflation Bonds With Your Tax Refund
If you were planning to use your tax refund to buy the paper version of inflation bonds, you're out of luck: That option has been eliminated. The Treasury Department ended its tax-time savings bond program as of Jan. 1. The program was the last way to buy the paper version of I bonds, as Series I savings bonds are known. The bonds aim to protect savers against the rising cost of living by paying an interest rate linked to inflation. Some people liked to give paper bonds as gifts, but others used the tax-time program because it let them buy as much as $5,000 in extra I bonds, beyond the allowed annual limit of $10,000 a person in digital bonds. (Couples filing jointly could buy a total of $25,000 in I bonds: $10,000 each, plus up to $5,000 with their refund.) Now, all savings bonds are digital and must be bought online using the department's TreasuryDirect system. And the extra $5,000 option has ended. 'You may continue to purchase up to $10,000 of series I bonds in a calendar year,' the system's website says. You can still get your tax refund sent to your checking account, say, and then use the money to buy digital I bonds via TreasuryDirect. What's going away is the ability to fill out a special form with your tax return and have the paper bonds bought with your refund. The change was quietly announced with a website update last year, under the Biden administration. The tax-time savings bond program was begun in 2010 to give tax filers, especially those with low and moderate incomes, a way to buy I bonds with their refunds. But the program 'was costly and not frequently used,' the TreasuryDirect site says. On average, 35,000 tax filers bought paper I bonds each year, representing .03 percent of tax filers and less than 10 percent of I bond purchasers. Mailing paper bonds risked fraud, theft, loss and delays, the site says, adding that buying savings bonds online is 'simple, safe and affordable.' David Enna, founder of a website that tracks securities that protect against inflation, said the government hadn't widely publicized its new I bond purchase policy. Some tax filers are likely to be disappointed, he said, because a popular strategy was to overpay taxes during a tax year to generate a tax refund to buy the bonds the next spring. The loss of the option to buy an extra $5,000 in I bonds will probably be unpopular among buyers, he said. The $10,000 annual cap, he said, is 'too small,' because it takes years to buy enough bonds to generate significant interest. I bonds, first issued in 1998, grabbed savers' attention during the pandemic-induced inflation surge. In 2022, the interest rate on I bonds rose to well over 9 percent, far outpacing rates on other safe options for cash. The low-risk bonds pay a rate made up of two parts: a fixed rate, set when the bond is issued and staying the same for its 30-year life, and a variable rate that changes every six months — on May 1 and Nov. 1 — based on the Consumer Price Index. The Treasury Department applies a formula to combine the two parts into an overall rate. Rates on I bonds have fallen to more pedestrian levels as inflation has eased. I bonds bought from Nov. 1, 2024, through April 30 are paying an annualized composite rate of 3.11 percent. That means the bonds aren't a compelling way right now for parking short-term cash, said Jeremy Keil, a financial planner near Milwaukee who tracks the bonds, because safe alternatives, including high-yield savings accounts and certificates of deposit, are paying 4 percent or higher. But the bonds remain attractive for people seeking a hedge against inflation over the longer term, he said. The current fixed rate on I bonds is 1.2 percent, one of their highest in recent years. Holders will also get a variable rate tied to inflation, he said. (When rates reset in May, it's likely that the base rate will stay about the same and the variable rate will increase, Mr. Keil said). Here are some questions and answers about I bonds: What else should I know about I bonds? Interest on the bonds is exempt from state and local income taxes. You'll owe federal tax on the interest earned, but you can wait to pay it until you cash the bond, if you want. You can't redeem the bonds until you have held them for at least a year. And if you cash them in before five years, you'll forfeit the last three months of interest as a penalty. What should I do if I have paper I bonds? You can hold them until you're ready to cash them in (at a bank, if you can find one that still does it, or by mailing them to the Treasury Department). Or you can convert them to electronic bonds using your online TreasuryDirect account. Can I still buy electronic I bonds directly, using my income tax refund? No. According to the I.R.S. Form 1040 instructions for 2024, 'The program allowing for your refund to be deposited into your Treasury Direct account to buy savings bonds, as well as the ability to buy paper bonds with your refund, has been discontinued.' Form 8888, which filers could previously use to direct refunds to buy the bonds, can be used to split a direct deposit refund into two accounts, like a checking or savings account or even an individual retirement account. But it cannot be used to deposit a refund into a TreasuryDirect account, said a Treasury Department spokesman.
