Savings bonds -- current interest rate & value

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Savings bonds -- current interest rate & value

Postby MB7 » Wed May 22, 2013 4:34 pm

I have a series EE savings bonds with issue date April 1992 and face value of $1,000. I've looked at the govt sites and simply can't figure out how much interest I'm CURRENTLY earning. I also can't figure out how much it's currently worth. Any ideas?
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Re: Savings bonds -- current interest rate & value

Postby whaleknives » Wed May 22, 2013 5:59 pm

From treasurydirect.gov:

    "EE Bonds January 1980 – April 1995: What is my bond worth now?

    Some of these bonds have stopped earning interest. EE Bonds earn interest for up to 30 years. To find out whether your bond is earning interest and what it is worth: see the Savings Bond Calculator."
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Re: Savings bonds -- current interest rate & value

Postby Johm221122 » Wed May 22, 2013 6:49 pm

MB7 wrote:I have a series EE savings bonds with issue date April 1992 and face value of $1,000. I've looked at the govt sites and simply can't figure out how much interest I'm CURRENTLY earning. I also can't figure out how much it's currently worth. Any ideas?

4% with final maturity in 2022.That is extremely good yield in today's environment
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Re: Savings bonds -- current interest rate & value

Postby Grt2bOutdoors » Wed May 22, 2013 7:10 pm

It has already doubled in value once, as the others have said it yield 4%. If you don't need the money, leave it alone - folks can't get 4% in a 30 year bond today.
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Re: Savings bonds -- current interest rate & value

Postby MB7 » Wed May 22, 2013 7:15 pm

Thanks all. Very helpful.

Follow-up question: How do I figure out what interest it earned each year (or whatever frequency makes sense) throughout the life of the bond?

For example, something like this:
1992: 3%
1993: 3.5%
1994 ...
...
2013: 4%
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Re: Savings bonds -- current interest rate & value

Postby Grt2bOutdoors » Wed May 22, 2013 7:18 pm

MB7 wrote:Thanks all. Very helpful.

Follow-up question: How do I figure out what interest it earned each year (or whatever frequency makes sense) throughout the life of the bond?

For example, something like this:
1992: 3%
1993: 3.5%
1994 ...
...
2013: 4%


Look it up on www.treasurydirect.gov - there they have the rates paid and yield to maturities for the bonds.
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Re: Savings bonds -- current interest rate & value

Postby Archie Sinclair » Wed May 22, 2013 7:33 pm

Johm221122 wrote:4% with final maturity in 2022.That is extremely good yield in today's environment
John

That's not necessarily true. From http://www.treasurydirect.gov/indiv/res ... 051995.htm:

Issued from November 1982 through April 1995

An EE Bond with an issue date in the time period from November 1982 through April 1995 earns interest either

at a guaranteed rate or guaranteed rates; or
at a market-based rate (85% of 6-month averages of 5-year Treasury securities yields)

whichever category of rates, separately, by itself, over the entire period from date of issue, produces the higher redemption value for the bond.

4% is the guaranteed rate. But the market-rate based was higher in past years. According to a chart from that same Treasury website, the market-based rate never fell below 4% until 2002, and still was relatively high from 2002-2008. Today it is 0.76%.

It's possible that you banked a lot of money from the market-based rate in the 1990s, so the guaranteed amount based on the guaranteed rate is far behind. That would mean that you're effectively earning only 0.76% by keeping the bond today.

You could use the chart to calculate whether this is the case.

To find out how much it's worth, as opposed to how much it is earning, use the Savings Bond Calculator: http://www.treasurydirect.gov/indiv/too ... ndcalc.htm.
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Re: Savings bonds -- current interest rate & value

Postby Johm221122 » Wed May 22, 2013 7:55 pm

Calculator Results for Redemption Date 05/2013

"  InstructionsHow to Use the Savings Bond CalculatorNotes DescriptionNINot IssuedNENot eligible for paymentP5Includes 3 month interest penaltyMAMatured and not earning interestTotal PriceTotal ValueTotal InterestYTD Interest$500.00$1,452.00$952.00$28.40Bonds: 1-1 of 1Serial #SeriesDenomIssueDateNextAccrualFinalMaturityIssuePriceInterestInterestRateValueNote NAEE$1,00004/199210/201304/2022$500.00$952.004.00%$1,452.00 CALCULATE ANOTHER BOND"

According to treasury direct it is earning 4%
http://www.treasurydirect.gov/BC/SBCPrice
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Re: Savings bonds -- current interest rate & value

Postby Mel Lindauer » Wed May 22, 2013 8:24 pm

Many of those older EE Bonds are guaranteed to pay the HIGHER of 4% or market rates, so 4% is the floor.
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Re: Savings bonds -- current interest rate & value

Postby Archie Sinclair » Wed May 22, 2013 9:00 pm

Johm221122 wrote:According to treasury direct it is earning 4%
http://www.treasurydirect.gov/BC/SBCPrice
John

Yes, but when the tool says the bond is earning 4%, what is it describing? The guaranteed rate or the actual rate? Do we know how sophisticated the tool is?
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Re: Savings bonds -- current interest rate & value

Postby Mel Lindauer » Wed May 22, 2013 9:21 pm

Archie Sinclair wrote:
Johm221122 wrote:According to treasury direct it is earning 4%
http://www.treasurydirect.gov/BC/SBCPrice
John

Yes, but when the tool says the bond is earning 4%, what is it describing? The guaranteed rate or the actual rate? Do we know how sophisticated the tool is?


The 4% is the 4% that's the guaranteed minimum under the Code of Federal Regulations for those EE Bonds.

§ 351.22 31 CFR Ch. II (7–1–12 Edition)
these yields and the resulting redemption values are described below:
(a) Guaranteed minimum investment yield and resulting values during an extended maturity period. A bond may be subject to one guaranteed minimum investment yield during its original maturity period and to another such yield during each of its extended maturity periods.

(2) Bonds entering an extended maturity period on or after March 1, 1993.
Bonds that entered or enter an extended maturity period on or after March 1, 1993, have a guaranteed minimum investment yield of 4 percent per
annum, compounded semiannually,
during that extended maturity period, or the guaranteed minimum investment yield in effect at the beginning of
that period.
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Re: Savings bonds -- current interest rate & value

Postby Clever_Username » Fri May 24, 2013 9:36 am

What do you do with a series EE bond when they stop earning interest? Do you have to cash it in right away?
Some people set aside money for a rainy day. I'd like to be prepared for the monsoon season.
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Re: Savings bonds -- current interest rate & value

Postby Epsilon Delta » Fri May 24, 2013 10:08 am

Grt2bOutdoors wrote:It has already doubled in value once, as the others have said it yield 4%. If you don't need the money, leave it alone - folks can't get 4% in a 30 year bond today.

Since it matures in 2022 it is effectively a 9 year bond at this time. It's better to use the 10 year rate for comparison rather than the 30 year, though you'll get the same result.
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Re: Savings bonds -- current interest rate & value

Postby Default User BR » Fri May 24, 2013 1:09 pm

Clever_Username wrote:What do you do with a series EE bond when they stop earning interest? Do you have to cash it in right away?

You are required to pay the interest in the year that it reaches final maturity. If it's held at Treasury Direct they will cash it for you. Paper ones generally get a 1099 issued by the bank that cashed them in the year you actually do it. It's likely that the IRS would never know, but why take chances?


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Re: Savings bonds -- current interest rate & value

Postby Archie Sinclair » Fri May 24, 2013 8:56 pm

I now accept that the bond is actually earning 4%. I used the Savings Bond Wizard (http://www.treasurydirect.gov/indiv/too ... wizard.htm). Using the characteristics described, a bond would have a value of $1452.00 in May 2013. It would have been worth $1395.60 in May 2012. So, in the last year it earned 4.04%. You should check for yourself using the Wizard.
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Re: Savings bonds -- current interest rate & value

Postby Clever_Username » Fri May 24, 2013 10:51 pm

Default User BR wrote:
Clever_Username wrote:What do you do with a series EE bond when they stop earning interest? Do you have to cash it in right away?

You are required to pay the interest in the year that it reaches final maturity. If it's held at Treasury Direct they will cash it for you. Paper ones generally get a 1099 issued by the bank that cashed them in the year you actually do it. It's likely that the IRS would never know, but why take chances?


Brian


Thanks. Yeah, I wouldn't try to hide it; it's just that I believe I'll be in a lower tax bracket in 2014 than 2013, so if I had the (legal!) option of deferring until then, I would.
Some people set aside money for a rainy day. I'd like to be prepared for the monsoon season.
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Re: Savings bonds -- current interest rate & value

Postby CashIsKing » Tue Jun 11, 2013 9:55 am

Grt2bOutdoors wrote:It has already doubled in value once, as the others have said it yield 4%. If you don't need the money, leave it alone - folks can't get 4% in a 30 year bond today.


Yet you can get 4% in a simple FDIC Insured checking account with just a few requirements that I find quite easy to satisfy. Check out Great Lakes Credit Union's Ultimate Checking account.
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Re: Savings bonds -- current interest rate & value

Postby Johm221122 » Tue Jun 11, 2013 10:04 am

CashIsKing wrote:
Grt2bOutdoors wrote:It has already doubled in value once, as the others have said it yield 4%. If you don't need the money, leave it alone - folks can't get 4% in a 30 year bond today.


Yet you can get 4% in a simple FDIC Insured checking account with just a few requirements that I find quite easy to satisfy. Check out Great Lakes Credit Union's Ultimate Checking account.

I don't think many of can join, unless we move
https://www.glcu.com/new-member-sign-in/
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Re: Savings bonds -- current interest rate & value

Postby CashIsKing » Tue Jun 11, 2013 12:09 pm

Johm221122 wrote:
CashIsKing wrote:
Grt2bOutdoors wrote:It has already doubled in value once, as the others have said it yield 4%. If you don't need the money, leave it alone - folks can't get 4% in a 30 year bond today.


Yet you can get 4% in a simple FDIC Insured checking account with just a few requirements that I find quite easy to satisfy. Check out Great Lakes Credit Union's Ultimate Checking account.

I don't think many of can join, unless we move
https://www.glcu.com/new-member-sign-in/
John


Not true. Don't believe everything you read. $5.00 gets you in. Give them a call. I live in NJ. Just opened what will probably be the first of three $10000.00 accounts. I use the heck out of my debit card, so it should be no problem satisfying that requirement. I did this with Danvers Bank from Mass for a couple years, and then with People's United when they took over Danvers Bank. Unfortunately, they changed it. But switching banks is just a few keystrokes.
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