US Savings Bonds

Archive for August, 2008

Question: How long does it take for a US savings bond take to reach face value?

Answer: There’s no set date anymore.

The interest rate determines when the bond will double. At 4%, it will take roughly 18 years.

Making it easier to save for retirement

A complete overview of EE Series Bonds, Part III

(c) Copyright 2006 by Harold Pennington 

The Liquidity of Series EE Savings Bonds

Series EE Savings Bonds must be held a minimum of one year, which is far better than many other government-backed bonds. You can redeem them anytime after that period. 

Who is eligible to buy EE Series Bonds?

EE Series Savings Bonds are like any other government-backed bond in that they can be owned by the same investors. This is strictly: 

• Individuals (at any age!)
• Corporations
• Associations
• Organizations (public or private)
• Fiduciaries

However, at this time, only Individuals can open a Treasurydirect account and purchase Savings Bonds online. 

It might also be important to note that individuals who can own any kind of US Savings Bond must have a Social Security Number, and be either a Resident of the US or outlying territory, a Citizen of the US living abroad, or a Civilian employee of the US, regardless of residence. 

EE Series Bond Rates and Terms

Series EE Savings Bonds issued during May 2005 and afterwards earn a fixed rate of interest decided by the FED, and can be checked in any newspaper finance section daily. Before May 2005, their interest wasn’t fixed, but tied to a variable rate that wasn’t very popular with investors, so that’s the main reason you’ve only heard of them lately. 

Interest rates for all new bond issues are adjusted each May 1st and November 1st. So if you’re shopping bonds in late April or October, pay really close attention to the trend in interest rates before purchasing! 

Also, Series EE Bonds compound in interest semiannually. This means that your interest can work on top of previous interest, giving you a better return each year.

Question: EE Savings Bond question?

So my friends and I are winning a huge science fair. The prize is a $8,000 dollar EE saving bond.

When will I be able to cash it in for its FULL price? (I dont know when it matures or anything)

Will the government tax the money (Its a military sponsored science fair)?

In the current economy (It will be in my Bank of America Checking account that I opened this year) how much will the interest be on it?

Do I receive it in paper form (like a check) or in online form (like paypal)?

Thanks!

Answer: Series EE Savings Bonds receive a fixed interest rate for up to 30 years (1.30% through April 30, 2009). If it is a paper savings bond, then the current value is $4,000 but if it is an electronic savings bond then the current value is $8,000.

This money would normally be taxable as income and the bond is not something you put in your Bank of America account.

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