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| Shador |
 Posted: Wed Feb 28, 2007 10:59 am Post subject: Question on EE Bonds |
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Ok, I'm thinking about getting some EE bonds. Here is what I want to know (the Treasury site was kinda unclear to me):
The treasury site says that:
1. EE Bonds are (currently) at a rate of 3.6%
2. EE Bonds gain value every month.
3. EE Bonds are compounded semiannually.
Ok, so I want to know if I understand this right.
If I buy a $100 Bond, that means that for six months, it would gain $3.60 a month, for a total of $21.60. Then that is added to the initial $100 to make $121.60. For the next six months, the Bond would gain $4.38 (3.6% of $121.60) a month, total $26.28, then the bond becomes worth $147.88, and the intrest is based on the for six months, etc.
I figure that I must not be understanding it right, as that sounds like far too good of a return to be true.
Can someone please explain it to me?
(Please just explain the EE bonds. Don't try to tell me why other investments are better, or compare things, etc. I am not at all interested in stocks. I decided to look at Treasury bonds because of the low/no risk. Thank you.) |
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| Dave Rathbun |
| Posted: Wed Feb 28, 2007 1:29 pm Post subject: |
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CFO
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They don't gain 3.6% a month.  They gain 3.6% a year, paid monthly. So take 3.6% and divide by 12 to get your expected monthly increase. |
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| Shador |
| Posted: Wed Feb 28, 2007 1:52 pm Post subject: |
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New Poster
Joined: 28 Feb 2007
Posts: 3
This Month: 0
2065.26 e$
Net worth: 4,968.16
Portfolio Value: 2,902.90
Monthly Return: -2.30%
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Churn Rate: 0.00%Items
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Aha. So it would be:
I buy a $100 Bond, that means that for six months, it would gain $0.30 a month, for a total of $1.80. Then that is added to the initial $100 to make $101.80. For the next six months, the Bond would gain $$0.31 (0.3% of $101.80) a month, total $1.86, then the bond becomes worth $103.66 and the intrest is based on the for six months, etc.
Which produces much more believable values.
Thanks Dave. |
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| Dave Rathbun |
| Posted: Wed Feb 28, 2007 3:08 pm Post subject: |
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CFO
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| Yup, I believe you've got the numbers correct now. There aren't many guaranteed investments that return nearly 4% a month. |
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| Im Not Warren Buffett |
| Posted: Wed Feb 28, 2007 3:41 pm Post subject: |
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CFO
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| Dave Rathbun wrote: | | Yup, I believe you've got the numbers correct now. There aren't many guaranteed investments that return nearly 4% a month. |
Oh come on Dave, the Jamaican HYIP I put all my money into returns 4% per day!   |
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| remotivator |
| Posted: Sat Mar 03, 2007 7:48 pm Post subject: |
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Investing Sr. Associate
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["Oh come on Dave, the Jamaican HYIP I put all my money into returns 4% per day!"]
 Exsqueeze me? Baking powder?
Translation: Pardon the rookie ignorance, but are you pulling his proverbial leg, or are you being serious? |
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| Im Not Warren Buffett |
| Posted: Sat Mar 03, 2007 9:23 pm Post subject: |
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CFO
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Haha, the "Jamaican HYIP" reference was a complete joke. Think about it - 4% per day?!
If you don't know what an HYIP is, don't even bother looking it up. All you need to know is HYIP is four letters, and so is "scam". |
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| davef139 |
| Posted: Sun Mar 04, 2007 6:11 am Post subject: |
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Investing Associate
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| Do note, you cannot cash out bonds for 12months. Also if you cash out before 5 years (I think) you loose the last month or 2 of interest. If you got a little more money then $100 look into 28day t-bills, there like 5.2% now and exempt from state taxes, i float all my money in these. |
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| Shador |
| Posted: Thu Mar 08, 2007 2:04 am Post subject: |
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New Poster
Joined: 28 Feb 2007
Posts: 3
This Month: 0
2065.26 e$
Net worth: 4,968.16
Portfolio Value: 2,902.90
Monthly Return: -2.30%
Trades this month: 0
Churn Rate: 0.00%Items
|
| Thanks for the replys guys. After looking over all the options, I went with one of those HSBC Direct Savings accounts with the 6% APY. (Saw this mentioned in some other thread around here.) |
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| NCSUPAGE |
| Posted: Thu Mar 08, 2007 4:24 am Post subject: |
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Investing Manager
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I received a $50 EE Bond at every Birthday and Christmas until I was 18, and I've been cashing 'em in to help pay for college. I love those things because it's amazing what they gain over their lifetime!  |
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| MEDIC1FF |
| Posted: Fri Mar 09, 2007 10:53 am Post subject: |
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Investing Sr. Associate
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Where does one get the 28 day t-bills. and what are the tax burdens come tax time
Dave |
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| davef139 |
| Posted: Thu Mar 15, 2007 6:21 am Post subject: |
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Investing Associate
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| MEDIC1FF wrote: | Where does one get the 28 day t-bills. and what are the tax burdens come tax time
Dave |
Purchase them online treasurydirecct.gov
They are bought at interested discount in $1000 qty's, so you buy $1000 u would pay 997, and then they would deposit a full $1000 back. As far as taxes you only pay federal no state. The signup process is pretty easy also. |
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| zerolikedis |
| Posted: Mon Mar 26, 2007 10:54 am Post subject: |
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Investing Manager
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| i want a paper bond that has MLK on it . do you know which bank in so florida that sells paper bonds. btw i have a online account tresdirect but i just want a couple paper ones to give as gifts |
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