Savings bonds are not necessarily the most glamourous of investments. However, they can certainly provide a stable return in a volatile market. But when should you consider redeeming a savings bond?
Savings bonds that are more than 30 years old will no longer be earning interest. Redeeming these and reinvesting the proceeds into an interest bearing investment may be a wise decision.
Series EE savings bonds dated May 1995 to April 1997 typically pay less than 2% interest. Consider reinvesting those assets to achieve a better return.
Series EE savings bonds issued after April 2008 pay 1.4% interest or less. These are good candidates for redemption towards a higher yielding investment.
Series I Bonds with fixed rates above 0.5% additionally pay a variable inflation rate. These bonds may or may not be a good idea to keep depending on inflation forecasts.
Keep in mind that savings bonds issued before May 1997 accrue interest twice a year. If you decide to redeem these bonds, you may want to wait until the first day or two after interest has accrued to maximize your investment.
Discuss your savings bond holdings with your financial professional to make the best decisions for your particular circumstances and financial needs.
Conveniently located in Central New York state, Ann Wolfson Associates is a financial planning and consulting firm dedicated to helping individuals, families and organizations reach their financial goals. If you have questions about this article or if you would like to become a client of Ann Wolfson Associates, please call (315)449-4730.