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Student Question of the Week: Series EE Bonds Interest

Student: Question from Matt F.
Course: Fundamentals of Financial Planning

Student Question:

I have several clients that inquired about this recently – they have several Series EE bonds that are maturing or have matured. Do these bonds continue to pay interest after maturity? Is the interest the same amount if so?

Thanks.

Matt


Instructor Response:

Hey Matt-

We don’t often get EE questions!  A bit of a tricky question here.  When E/EE bonds hit their original maturity date, they will automatically enter one or more extension periods before they eventually reach a final maturity date.  So from that perspective, yes they do continue to earn interest after their maturity date. But only their original maturity date. Once they hit their final maturity, they will no longer earn any interest regardless of how long you hold them.  You obviously don’t have to turn them in right away, but they won’t increase in value.

The Treasury Department has a site where you can check if the bond has stopped earning interest.  http://www.treasurydirect.gov/indiv/research/securities/res_securities_stoppedearninginterest.htm

Hope that helps!

Dan