By: Revanche

Bonds, I-Bonds

April 17, 2008

Well well, Treasury Direct, we meet again. And this time, you have something up your sleeve. You’ve got some I-bonds that I’d like to take a look at. Not only can I purchase up to $5000 worth of online I-bonds at a total interest rate of 4.68%, I only have to hold them for a year to get nearly as much interest as my once vaunted Emigrant Direct and IngDirect savings accounts yielded not so long ago. If the interest rate holds, I could even hold them for longer than a year. Actually, as a commenter on Jonathon’s post pointed out, the latter six months of the year will have a higher interest rate than the first six months, so I would plan to hold the bond an extra three months so that my penalty of three months’ interest is taken from the tail end, at a presumably lower rate. I don’t mind the maximum cap of $5000, either, because that’s fully one third of my emergency fund and I wouldn’t feel comfortable losing any more liquidity from the emergency fund than that. (Jonathon of MyMoneyBlog explains Series I savings bonds much better than I can.)

But wait, Treasury Direct has yet another ace up its sleeve! I can also convert my paper bonds into electronic bonds! I have a single Series EE bond hidden away in my room, the prize for a scholarship back in my junior year of high school before the Kiwanis figured out that a Series EE bond is worthless to a high school grad paying for college expenses since it takes 30 years to fully mature. It’s already been ten years (mein Gott!) but I still have another 20 years to hope I don’t lose the dang thing. Now, however, I needn’t hope any longer. I can convert that baby into an electronic bond, and monitor it online! The paper bond can become a bit of scrapbook fodder.

I’ll be back, I have to open a Treasure Direct account right now. If for nothing else, converting my single solitary Series EE bond will be totally worth it.

3 Responses to “Bonds, I-Bonds”

  1. Dedicated says:

    You can cash out your Series EE – from treasury direct – download the savings bond wizard to track your bonds. You can enter the Series EE bond and see what it is worth and what the penalty to cash is. Since you are past the 5 year mark – there should be none.

    The 30 year number – is when this particular bond – STOPS earning money for you.

  2. Dedicated says:

    oh – if you want – you can just take it to your bank and get the numbers. It’s fast and easy.

  3. ~dedicated~ You’re right, I can track it online, I just don’t want to have to worry about losing the paper bond between now and when I want to cash it. I don’t want to redeem it yet, I’d rather let it mature unless I have some dire need for the cash.

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