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progree

(10,901 posts)
27. Odd the EE savings bonds suck so much (these are the ones without the inflation adjust)
Fri May 21, 2021, 11:38 AM
May 2021

Last edited Fri May 21, 2021, 01:13 PM - Edit history (2)

I found this on EE savings bonds:

If I buy an EE bond now, what interest will it earn? The interest rate for a bond bought from May 2021 through October 2021 is an annual rate of 0.10%. Regardless of the rate, at 20 years the bond will be worth twice what you pay for it. If you keep the bond that long, we make a one-time adjustment then to fulfill this guarantee. Learn more on Interest Rates – Current and Past

MAXIMUM PURCHASE: $10,000 each calendar year for each Social Security Number.
MORE: https://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds_eeratesandterms_eebondsissued052005andafer.htm


So two very big bummers: 0.10% interest rate unless you hold it for 20 years. Then yes, it guarantees that one will get double back, which works out to a 3.526% annualized rate of return. Otherwise, peanuts.

1.03526^20 = 2.0 (a doubling over 20 years)

And then one is limited to purchasing $10,000/year, so somebody looking to invest a reasonable retirement nest egg will have to look elsewhere (according to Fidelity, a 65 year old couple can expect to pay an average of $300,000 out of pocket over their lifetimes, including on Medicare premiums).

I'm still trying to figure out the I bonds (the ones with the inflation adjust) and if one has to hold them for decades to get the 3.54% interest rate. I haven't been able to find a clear answer to that at the Treasury site, but doing a Google, it kind of seems my suspicion is right,.

I bonds at a glance: https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm

Series I Savings Bonds Rates & Terms: Calculating Interest Rates: https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm

Edited to add 1:04 PM ET -

This one makes the I-bond look like the real deal.
https://www.depositaccounts.com/blog/inflation-treasury-series-i-savings-bonds/

They:

Can't be redeemed within 12 months of issue date

Lose 3 months interest if redeemed within 5 years

(but no other holding time requirements other than these that result in losing interest)

But: Maximum purchases per year and per social security number is $10,000 in TreasuryDirect and $5,000 in paper bonds purchased with IRS tax refunds (This excludes trust/business purchases)
How much you got? Asking for a friend. marble falls May 2021 #1
$1,900,000,000,000 give or take a few trillion nt doc03 May 2021 #13
So what's your motive for more income? ... marble falls May 2021 #14
Greed nt doc03 May 2021 #19
I posted before I was finished, please read it again, I made a serious reply. marble falls May 2021 #23
There are plently of guaranteed investments returning way more than 0.3 % drray23 May 2021 #2
Where in the world are you seeig a guaranteed 3%? I believe nowhere. NoRethugFriends May 2021 #3
thats why you have to work with advisors and financial managers. drray23 May 2021 #6
Looks like you have TIAA Traditional Abnredleg May 2021 #8
yeap. so am i (in academia) drray23 May 2021 #9
elsewhere its also offered under a different name. drray23 May 2021 #11
I am not familiar with the instrument Tomconroy May 2021 #17
well yes its not meant for you to get high returns. drray23 May 2021 #20
I think the company has figured out Tomconroy May 2021 #24
It appears you have a misunderstanding of what TIAA does and what an Annuity is. A HERETIC I AM May 2021 #37
He wrote .3% not 3% rickford66 May 2021 #21
No I wrote 3 % drray23 May 2021 #26
I put a group named Blooom in control of my 401(k), which is with another company. NBachers May 2021 #4
Are you retired? A HERETIC I AM May 2021 #36
I was reading an article today that Tomconroy May 2021 #5
I'm 71 and have been retired for 19 years. multigraincracker May 2021 #7
Send it to me in bitcoin. Chainfire May 2021 #10
I did look it up. The interest on US Savings bonds Tomconroy May 2021 #12
Thanks for the input. I have my IRAs Invested in Vanguard and T.Rowe Price doc03 May 2021 #18
Savings bonds you can cash out early. Tomconroy May 2021 #22
Remember the old days when they'd roll them over if you didn't cash them in? marble falls May 2021 #25
I went thru the 2008 and 1984 multigraincracker May 2021 #29
Odd the EE savings bonds suck so much (these are the ones without the inflation adjust) progree May 2021 #27
I do not believe that annuities are a good investment Tomconroy May 2021 #15
Annuities are essentially insurance products. A HERETIC I AM May 2021 #35
There are different kinds of annuities. PoindexterOglethorpe May 2021 #38
Some may compare annuity yields to those of bonds and CD's without understanding the differences progree Jun 2021 #40
My annuities will not die with me, if there is still any value left. PoindexterOglethorpe Jun 2021 #41
I'm guessing interest rates and annuity yields were considerably higher when you bought progree Jun 2021 #42
Yes, rates were somewhat higher then. PoindexterOglethorpe Jun 2021 #43
On the 4% rule - progree Jun 2021 #45
You can get 4% - 5% guaranteed return tax free calguy May 2021 #16
I haven't seen anything like 4% - 5% anywhere for a long long time, and municipal bonds are not a progree May 2021 #28
We might not be talking about the same thing. calguy May 2021 #30
Can new investors buy these, e.g. the EVM Eaton Vance California Municipal Bond Fund progree May 2021 #31
You just have to have an account with a stock broker calguy May 2021 #32
Thanks much 😂 I just went to Vanguard.com (where I have an account) progree May 2021 #33
Everything has risk bucolic_frolic May 2021 #34
I want to strongly second what bucolic_frolic said. PoindexterOglethorpe May 2021 #39
I have a majority of my money in four Vanguard funds bif Jun 2021 #44
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