US Savings Bonds

Posts Tagged ‘Series EE Savings Bonds’

Series EE Savings Bonds Tax-Free Rollover to Education IRA

The interest rate on Series EE US Savings Bonds are low

Many people have substantial assets locked up in Series EE US Savings Bonds, earning a very low interest rate.

In order to better the interest rates from Series EE US Savings Bonds, they may not want to diversify away from the Savings Bonds to get an enhanced rate of return because the growth in the Series EE US Savings Bonds will be taxed at ordinary income tax rates upon redemption.

Rollover Series EE US Savings Bonds proceeds into Educational IRA

But, they may be eligible to redeem the Series EE US Savings Bonds and roll the proceeds of the Series EE US Savings Bonds into Education IRA s for their children, if certain requirements are met.

The redemption of the Series EE US Savings Bonds will be tax free, and the growth in the Education IRA, as always, is tax free (not merely tax deferred), so long as the assets are used for qualified education expenses.

No more than $2000 may be contributed per year on behalf of any child.

Any Series EE US savings bond proceeds not rolled over into Education IRA s will be subject to tax.

Series EE Savings Bonds are popular US Savings Bonds guaranteed by the government. Series EE Savings Bonds are very safe investments. You can buy electronic series EE Savings Bonds or you can buy the paper series EE Savings Bonds. Electronic series EE Savings Bonds are different from the paper Series EE Bonds.

How much Series EE Bonds can I buy in a year?

You are limited to and cannot exceed buying $5,000 series EE Savings Bonds a year.

Buying electronic series EE Savings Bonds

Electronic series EE Savings Bonds are sold at face value unlike paper series EE Savings Bonds. That means, if you were to buy $50 series EE Savings Bonds, you will pay $50 for each bond. When the electronic series EE Savings Bonds mature, they are worth the face value ($50 in this case). When you buy series EE Savings Bonds, you will see them shown up in your account, you will not receive actual bond certificates for them.

Buying paper series EE Savings Bonds

Paper series EE Savings Bonds are sold at 50% discount, unlike electronic Series EE Bonds. That means, when you buy series EE Savings Bonds, you pay half price. A $50 series EE bond will cost you only $25, making it an attractive and affordable investment for most people. When the series EE Savings Bonds mature, though, you redeem the full face value, not the 50% discounted price you paid.

When you buy paper series EE Savings Bonds, you will be issued the US savings bond certificates that you have to keep well and replaced if lost.

How to find out the bond value?

If you have a US savings bond and do not know its value, you can use the online Us Savings Bond Calculator to calculate your savings bond value. Another program that is useful in calculating and estimating Us Savings Bond Value is the Us Savings Bond Wizard program that is provided by the US Treasury Department for free of charge.

Using the Savings Bond Wizard to calculate the savings bond value

The drawback of using the Savings Bond Wizard is that you have to download the program, install and use. The Savings Bond Wizard program is harder and more complicated to use then the simple Us Savings Bond Calculator which you do not need to install or download to find the savings bond value.

What is the future savings bond value?

The Us Savings Bond Value at a future date varies based on when the savings bond is issued. Some US Savings Bonds have fixed rate of interest while others have variable and even inflation indexed rate.

The savings bond value is guaranteed

The US government guarantees the savings bond value which makes US Savings Bonds very safe investments. The value of Series EE Bonds, for example, is guaranteed by the US government to double in 20 years.

Us Savings Bond Value grows slowly

The drawback of investing in US Savings Bonds for most investors is that interests accumulate slowly reflecting the safety of the investment. While investing in the stock market, you can usually double your money in a short amount of time in relatively good market, you have to wait 20 years for the savings bond value to double if you invest in Series EE Savings Bonds.