US Savings Bonds

Posts Tagged ‘us savings bonds ee value’

Question: what is better to buy EE or I US Savings Bonds?

Answer: The two types are similar, but the I-bonds are indexed to the inflation rate. If you think inflation will rise, then I-bonds are probably a better choice of the two. Right now,
I- bonds pay a higher interest rate than EE.

Buy United States Savings Bonds 1985

Question: I want to buy us Savings Bonds for my kids. If I pay $100 what will get me the best return in 20 or 30 years?

an EE savings Bond or an I savings Bond? I am not good at this investing thing. Thank you for your help. I know that if I pay $100 for an EE Bond that the face value can be $200. But this is all confusing. What is the best one to buy?
What one would you buy? an EE or an I savings bond for your kids. All I know is that an e bond was given to me when I was born and they apid like $19 for it with a face value of $25. I just cashed it in 30 years later for $136. that is not bad. I want to get the same thing for my kids but do not know which is better an EE or an I Bond since the E bond is no longer available.

Answer: the best Bond to buy is the one which have the highest interest rates and also the shortest withdraw time. then using the interest rate you can calculate the added value to the bonds after T years using the following formula :

X(T) = a * (1 + b) ^ (T/t) where : a = initial value of bond, b = growth factor (in this case interest rate), T = the year of withdraw and t = in this case is 1.

I should also mention that by withdraw time, I mean the minimum time that the contract doesn’t allow you to withdraw your money.

EDIT : let me give you an example, if the initial price of bond is $100 as you suggested, and its intrest rate, lets say it is 15% per year, and you are planing to withdraw your bond in 20 years time, using the above formula, you will be able to withdraw :

100 * ( 1 + (15/100)) ^ (20/1) = $1636.65

now if you withdraw it in 30 years, it will be :

100 * ( 1 + (15/100)) ^ (30/1) = $6621.18

it is also important to take inflation rates into account as well, cause you should also consider that $6600 in 30 years time will have much lesser value than now.

EDIT: in the case of which one of the EE or I Bonds are better, it really depends on how much you would like to invest per year, I suggest reading : http://www.journalofaccountancy.com/Issues/2004/Sep/EeVsIBondsWhichAreBetter.htm

which I think is a very accurate comparison between the two.

generally, I think in long term I Bonds tend to be better, but it might be a different case for you, so please read that article.

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