US Savings Bonds

Posts Tagged ‘ibond’

Question: WHY ARE us Savings Bonds taxed after maturity?

Answer: it’s part of the deal! that’s the problem with bonds, hard to keep up with inflation after taxes.

US Savings Bonds Scam

Question: Are US Series I Savings Bonds a Good Investment?

The IRS allows you to purchase them with your tax refund. Is this a good idea? What is current fixed rate? How is the 6 month inflation number calculated? It is from the CPI?

Answer: Gee Janice. You sure know how to get into the details. It is the CPI-U number published each month by the Federal Bureau of Labor Statistics. CPI-U means Consumer Price Index for Urban Consumers. The Fed usually defines Urban as all large cities plus SMSAs.. SMSA means Small Metroplolitan Statististical Areas. And that means urbanized cities with 50,000 population or more. Is it any wonder that people go nuts trying to understand this stuff.

Anyway. The Series I has two components – the fixed rate you know and the variable rate you should probably just google. If google does not cut it for you then here goes.

The November rate is based on the CPI-U for the previous March subtracted from the CPI-U for the previous September. That difference is then divided by the CPI-U for the previous March. If there is a March to September increase, then you get an increase. If it’s down, your rate goes down. This rate will now apply to bonds from November to April.

The May rate is based on the CPI-U for the previous September subtracted from the CPI-U for the previous March. That difference is then divided by the CPI-U for the previous September. And etc. per previous paragraph. This rate will now apply to bonds from May to October.

Right now I would say a good investment for staying safe and still having a shot at higher rates. Just my opinion on how I see the road ahead.

Professors Xiao, Huo on Current Economy 2/2

Question: How can I find out what my US Savings Bonds are worth? Where can I cash them?

Bonds were issued 04-2001 Series EE.

Answer: The Us Savings Bond Calculator is here: http://www.publicdebt.treas.gov/sav/savcalc.htm

You can cash them at any bank.