Please explain EE bond compounding

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boater07
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Please explain EE bond compounding

Post by boater07 » Tue Jan 02, 2018 1:07 pm

I have several $5000 bonds issued in 2002 with a rate of 1.68%.
They have earned a little over $1000 in 15 years. How can they earn
almost $1500 in little more than 4 years to reach the double guarantee
Maybe the value will magically appear at the 20 year mark.
Is my math that off??

spacecadet610
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Re: Please explain EE bond compounding

Post by spacecadet610 » Tue Jan 02, 2018 1:10 pm

There is miniscule interest earning on EE bonds until 20 years is hit at which point it doubles in value.

Jack FFR1846
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Re: Please explain EE bond compounding

Post by Jack FFR1846 » Tue Jan 02, 2018 1:17 pm

Yes. The value magically doubles at the 20 year point. Well, maybe not magically....but it does double all of a sudden.
Bogle: Smart Beta is stupid

Grt2bOutdoors
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Re: Please explain EE bond compounding

Post by Grt2bOutdoors » Tue Jan 02, 2018 1:25 pm

Jack FFR1846 wrote:
Tue Jan 02, 2018 1:17 pm
Yes. The value magically doubles at the 20 year point. Well, maybe not magically....but it does double all of a sudden.
Well then, I anticipate lots of magic occurring over the next 20ish years! :D
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

boater07
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Re: Please explain EE bond compounding

Post by boater07 » Tue Jan 02, 2018 1:49 pm

Jack FFR1846 wrote:
Tue Jan 02, 2018 1:17 pm
Yes. The value magically doubles at the 20 year point. Well, maybe not magically....but it does double all of a sudden.
Thank you. Trying to figure out how to alert heirs to the values in my accounts.
Guess I'll leave instructions to update the Wizzard for more accurate values rather than my current list.
Maturity dates are too far out and they might want to cash out at the 20 yr mark

hawkfan55
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Re: Please explain EE bond compounding

Post by hawkfan55 » Tue Jan 02, 2018 2:14 pm

Think I read that the Savings Bond Wizard is being discontinued in mid 2018.
Just FYI.
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Mel Lindauer
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Re: Please explain EE bond compounding

Post by Mel Lindauer » Tue Jan 02, 2018 3:47 pm

hawkfan55 wrote:
Tue Jan 02, 2018 2:14 pm
Think I read that the Savings Bond Wizard is being discontinued in mid 2018.
Just FYI.
Yep, it's being discontinued in May, 2018. There will be no more updates after the current one.
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bluedemon67
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Re: Please explain EE bond compounding

Post by bluedemon67 » Tue Jan 02, 2018 6:11 pm

Jack,

I believe that if you purchased the bonds in 2002 that they will double in value in 17 years. Read this on the Treasury direct site and have purchased some of them in the same time frame. You may want to confirm this.

Grt2bOutdoors
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Re: Please explain EE bond compounding

Post by Grt2bOutdoors » Wed Jan 03, 2018 9:06 am

Mel Lindauer wrote:
Tue Jan 02, 2018 3:47 pm
hawkfan55 wrote:
Tue Jan 02, 2018 2:14 pm
Think I read that the Savings Bond Wizard is being discontinued in mid 2018.
Just FYI.
Yep, it's being discontinued in May, 2018. There will be no more updates after the current one.
Really? How will we easily keep track of the values?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Phineas J. Whoopee
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Re: Please explain EE bond compounding

Post by Phineas J. Whoopee » Wed Jan 03, 2018 10:10 pm

Grt2bOutdoors wrote:
Wed Jan 03, 2018 9:06 am
Mel Lindauer wrote:
Tue Jan 02, 2018 3:47 pm
hawkfan55 wrote:
Tue Jan 02, 2018 2:14 pm
Think I read that the Savings Bond Wizard is being discontinued in mid 2018.
Just FYI.
Yep, it's being discontinued in May, 2018. There will be no more updates after the current one.
Really? How will we easily keep track of the values?
Savings Bond Calculator

After you enter the data follow the instructions to save it, so in future months you simply run the calculator on the data in your files. The data lives on your machine or in your cloud solution product service dealy-thing.

PJW

lunean
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Re: Please explain EE bond compounding

Post by lunean » Wed Jan 03, 2018 10:31 pm

bluedemon67 wrote:
Tue Jan 02, 2018 6:11 pm
Jack,

I believe that if you purchased the bonds in 2002 that they will double in value in 17 years. Read this on the Treasury direct site and have purchased some of them in the same time frame. You may want to confirm this.
Yes, those 2002 bonds will double in 17 years. My husband inherited some EE bonds and many told me to just cash them in, but I've seen quite a few hit their maturity and gain quite a bit. We would have made a big mistake to cash them right away.

Edit: From this page: https://www.treasurydirect.gov/indiv/re ... 042005.htm "For EE Bonds with issue dates from May 1, 1997 through May 1, 2003, original maturity is 17 years after the issue date."

boater07
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Re: Please explain EE bond compounding

Post by boater07 » Thu Jan 04, 2018 12:37 am

Yes, those 2002 bonds will double in 17 years. My husband inherited some EE bonds and many told me to just cash them in, but I've seen quite a few hit their maturity and gain quite a bit. We would have made a big mistake to cash them right away.


wow--thank you. I'll be watching the 17 year values

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