???? on savings bonds

waddlesMarch 8, 2004

We received an EE series bond for our wedding about 8 years ago. I thought about cashing it in and buying two more with it as I thought it matured after 7 years. I have been doing a little bit of research and it says that it will not mature for 30 years - is this true.

I don't know that I can stay married for 30 years to get my half of the $50.00 out of him, possibly he will buy me out. lol

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joyfulguy

Hi waddles (or should I call you "duckie"?)

Some bonds mature earlier than others.

Some people, too.

Have a great week, and good wishes to you and yours,

ole joyful

    Bookmark   March 8, 2004 at 4:57PM
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KitchenGodsWife

Your bond doesn't have to be completely mature for you to cash it in, however. For older bonds, you just have to have it for 6 months. For newer ones, you have to hang onto it for a year. You WILL get somewhat less than face value. I'm including a link below where you can tell how much your bond is worth at this point in time.

Here is a link that might be useful: US Savings Bond Calculator

    Bookmark   March 9, 2004 at 10:08AM
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waddles

Kitchen - thanks for the link. I went on there and it says that in 8 years my bond has grown 9.08. I think this is crazy as it will not mature until 2026. Thankfully, it is a small bond and we don't really need the money just thought it would be fun to play with it and buy more bonds with it.

Unfortunately, my FIL bought a bunch of bonds for the kids thinking this would help with their schooling. Unless they start college when they are in their mid 30's this is not a good idea.

Whoever thought that hanging onto a bond for 30 years would be a great idea?

    Bookmark   March 9, 2004 at 12:22PM
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KitchenGodsWife

$9.08 isn't a bad return on a $25 investment when you consider that you are guaranteed to make that money. I think it's around 2.5% interest or something? Way better than what you can get in most savings and moneymarket accounts nowadays.

The original cost of a bond is half of face value, so basically in 30 years it will double in value. It will still accrue decent interest even if you don't wait until the maturation date. It's not going to be as good as some investments but it's guaranteed, which may or may not be important to you. The more risk you are willing to take, the higher possible returns.

I don't think buying bonds for young kids is a bad idea... it's a heck of a lot better than giving them cash that will be spent or put into a savings account!

    Bookmark   March 9, 2004 at 4:47PM
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cowboyind

Those are very good points. Plus you have tax advantages with U.S. Savings Bonds. Obviously on a $50 bond it's all pretty academic, but as KitchenGodsWife said, they are not a bad investment at all compared to what else is out there.

Instead of cashing your lonely $50 bond in, consider buying more. You can also get the Series I bonds that are indexed to the rate of inflation as well as having a minimum guaranteed rate of return. You can have money automatically deducted from your savings or checking account at intervals you choose, and bonds will be sent to you.

I know a family who buys cars this way: Instead of making payments, they have $200 or so taken out of their checking account each month to buy bonds. Then when they need a new car, they cash in the bonds and pays cash for it. So they're earning interest on car payments rather than paying interest.

Of course, they could invest the money in some other way, too. But I have found that at least for me, the advantage of bonds is that you see them and hold them in your hand, and you resist cashing them in until you really need to.

    Bookmark   March 10, 2004 at 1:18AM
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Don_

My wife and I have savings bonds maturing monthly. The young people at the bank are stunned when they see the interest. Keep your savings bond and the web site KitchenGodsWife recommended. You will enjoy your investment.

    Bookmark   March 10, 2004 at 7:57PM
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