I have a 30-year U.S. treasury bond (series EE) that is about 3 years away from maturity. I'm considering cashing it in. However, the purchase value was half the face value. If I cash it in, would I be missing out on this increase in value? Or do they determine fair value based on how close it is to maturity (in addition to the accrued interest)?
Your bond's current value reflects interest that has accumulated since the issue date. See, e.g., rates and terms for your bond on the Treasury Direct website. Also on that website, there is a calculator for determining the current value. Note that, per the first link:
Treasury guarantees that an EE Bond will be worth at least its face value when it reaches its original maturity date.
If, for some reason, the current value is much less than the face value, it may be worth waiting until the maturity date to take advantage of that guarantee. (I don't know whether or not such a discrepancy is possible in practice.)
In summary, you purchased the bond for some purchase price less than the face value. Over time, before the the maturity, the bond gains value beyond the purchase price due to interest. At the maturity date, the value will reflect either:
- the original purchase price, plus interest, or
- the face value,
whichever is higher. If you cash out before the maturity date, you get the original purchase price plus interest.