Calculating savings bond values: if you've been holding on to savings bonds, here's an easy way to determine their worth.

If you have old Series E savings bonds or plan on buying savings bonds tot education or retirement, figuring out how much those bonds are worth or how to purchase new ones just got easier. The Department of the Treasury has upgraded its Websites to help investors track and calculate the value of existing bonds as well as use its savings or checking accounts to buy new securities online.

"The average time it takes a bond to reach maturity is 17 years, but they will continue to pay interest for 30 years," says Mckayla Braden, senior adviser of the Treasury Department's Bureau of the Public Debt. TreasuryDirect.gov and www.publicdebt.treas.gov/sav/savcalc.htm have bond calculators that will tell you the current value of any bond once you enter its serial number and issue date. If you have a lot of savings bonds, you can download bond wizard software www.publicdebt.treas.gov/sav/savwizar.htm to find out the value, interest earned, and maturity date of your bonds.

You can set up an account at TreasuryDirect.gov with as little as $25 to make bond purchases online on a regular basis. "[You] can set up an account to buy bonds every month," says Braden. "Or you can link [purchases] to your savings, checking, or money market account, whichever you decide."

There are two types of savings bonds: Series EE/E and Series I.

Series EE/E Bonds: E bonds are the predecessor to EE bonds. They're bought at one-half their face value. For example, a $50 EE/E bond costs $25. Interest on these bonds is accumulated monthly and compounded every six months. An E bond is guaranteed to reach its face value in 20 years.

Series I Bonds: I bonds are bought at full face value; a $50 I bond costs $50. Interest is accumulated monthly, is compounded every six months, and earns a guaranteed real rate of return. In other words, the bond's interest is added monthly and paid when it's cashed.

August 2004 was the last issue month for Series HH/H bonds. Bond holders will no longer be able to reinvest HH/H bonds or exchange EE/E bonds for HH bonds. Neither can EE/E bonds be exchanged for I bonds or vice versa.

Redemption: Bonds issued in or after February 2003 must be held for a year before they can be redeemed. Bonds can be redeemed at any time after the initial holding period, but if you cash a bond before it is 5 years old, you will incur a three-month earnings penalty. Bonds can be replaced if they are lost, stolen, or destroyed provided they have not been cashed.

Taxes: Savings bond earnings are exempt from all state and local income taxes, but, according to the Bureau of Public Debt, they are subject to "federal income taxes and estate, inheritance, gift, or other excise taxes, both federal and state." Federal income taxes on earnings can be paid annually or at the time of bond maturity.

SAVINGS BONDS THAT NO LONGER
EARN INTEREST

E                          May 1941--July 1964 and
                             December 1965--July 1974

H                          June 1952--July 1974

HH                         January 1980--July 1984

Savings Notes              May 1967--July 1971

A, B, C, D, F, G, J, K     All Issues

IF YOUR BONDS HAVE STOPPED EARNING INTEREST YOU SHOULD CASE THEM IN
OR EXCHANGE THEM. PLEASE
NOTE. AUGUST 2004 WAS THE LAST ISSUE MONTH FOR HH/H BONDS. YOU CAN
NO LONGER REINVEST YOUR
HH/H BONDS OR EXCHANGE YOUR EE/E BONDS FOR HH BONDS