Savings bonds are notes in the form of money from the government that say they owe you a certain amount of money on them. But unfortunately this money will not be repaid to you by the government until 30 years after you have purchased them. However if you decide that you need the money before the 30 years is up then it is quite possible for cashing savings bonds in prior to this time. It is quite simple for you to any bank and cash them in. But what you must remember is that if you do decide to cash them in prior to the maturity period they will not have reached their full face value. Normally they will earn the amount that you have invested and any interest that has been earned during the time that you have held the bond.
Certainly many Americans see savings bonds as a safe form of investment as they are considered a debt to the US Government. Then once the period of time is up in which they mature the Government has returned the money that you have invested in the bonds plus any interest that has been earned on them. Normally most savings bonds if left for the full period to the end of maturity will have doubled their value.
With any savings bond the interest earned is added to them monthly and will be paid to you when cashing savings bonds in. However, should you decide to cash in the bonds during the first 5 years you will find that you will have to forfeit the last three months interest that you would have earned. This is a penalty that you will incur if you decide to cash in your bonds earlier than the date of maturity which as already stated is normally 30 years. So for example if you redeemed a bond after 18 months you will end up only getting 15 months of interest that has been earned on it.
When cashing savings bonds you will receive the original investment plus any interest that they have earned. Think about if it's worth it to cash them in early or if you have another way to get the money you need.
Dee Cohen is a publisher and author at http://www.spending-wisely.com/Stock-Brokerage-Companies/ where you can visit Cashing Saving Bonds to study bonds and other investment strategies.
Source: www.articlecity.com
