When it comes to working with a savings bond, there are several myths that are commonly spread. Here are some of the top savings bond myths to be aware of.

1. You Can't Redeem Them until They Mature

Many people believe that you cannot redeem a savings bond until it matures. In reality, you can redeem them any time after the first 5 years and not be penalized. If you redeem within 5 years, you will forfeit 3 months' interest.

2. You Earn Interest on Face Value

Some people think that you earn interest on the face value of the bond. In reality, you earn interest on what it is currently worth instead of the face value.

3. Hold Them after They Mature

Some people say that you should hold a savings bond even after it stops earning interest so that you can avoid paying taxes. In reality, you should cash in the bond and pay the taxes out of the money so that you will at least be able to get something out of it.

4. They Earn Bad Rates

When compared to other low-risk investments, savings bonds rates are usually very competitive.

5. Listen to Bank Tellers

If you need help with your savings bonds, bank tellers most likely do not know much about them. Banks do not have an incentive to sell these, so they usually do not train their employees about them. 

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