Savings Bonds - Cash them in or hold them longer?

[Anonymous]

Many years ago when I was in the military, I signed up to contribute to savings bonds in boot camp without having a clue about what that really meant or how it works. Ended up getting a few hundred dollars in EE bonds.

Flash-forward 20 years, my bonds have all matured and I ordered them from the Treasury recently. I'm not sure if I should go ahead and cash them in or hold onto them longer.

I have received conflicting information and was hoping some experts here could help out. On one hand, I thought once they matured, that was that and you cash them in, which you're basically getting today's dollar value at yesterday's prices. On the other hand, I heard from someone that you hold on to them until bond interest rates are higher, then you get that rate of return plus your 1990~ dollars value versus 2010~ dollar value. Did some digging around but I was hoping if someone here could break it down nice and simple.

As an added bonus, with the possibility of default, would it be best to cash them in now or wait until all this mess is over. What happens to mature bonds in a default anyway? Thanks.

[Anonymous]

EE bonds continue to earn interest for 30 years. What year did you purchase them? You are likely earning more money on them than you would on a similar low-risk investment today. I bought bonds in 1992 and 1993 and they are earning 4%. I'm not touching them.

Use this site to figure out what you're earning: http://www.treasurydirect.gov/BC/SBCPrice