By: Revanche

Piddlin’ Progress – Savings Bond

August 9, 2010

My high school service award was a $500 savings bond for college.

Our lovely Kiwanians, however, hadn’t really looked carefully at the terms of the bond, or the kind of bond they were buying, and 10 years later, the Series EE bond has only appreciated to a grand total of $374.  It’s the sort of bond that takes thirty years to accrue to full value, you see, and so was probably the worst choice for a college fund.

I can’t really decide if it’s worth waiting another 20 years for that bond to mature. Why not cash it out at $374 now and invest it or just put it toward one of my mid-term savings goals?


My thanks …..

to Miss Thrifty for hosting this week’s Carnival of Personal Finance and including my post: I almost lost 22K Starpoints!

Be sure to submit to next week’s Carnival!

5 Responses to “Piddlin’ Progress – Savings Bond”

  1. The Borrower says:

    You’d probably make more cashing it out and buying an I-bond, which isn’t saying much – but it is face value with better rates and compounding.

  2. In Debt says:

    Compare the interest rate before cashing out. Some of my older bonds are a guaranteed 4% which is more than I can get anywhere else right now.

  3. Jenna says:

    Do you need the money right now? How much will it be worth in 30 years?

  4. mOOm says:

    That’s an interest rate of 1%. There are certainly better rates on normal long-term government bonds but probably you need to buy at least $1000 of them. If you can get more than 1% from a CD then do it. And there is a gain from making life simpler.

  5. Revanche says:

    @The Borrower: I’ve been waiting for i-bonds to perk up just for a cash purchase but this could very well go toward that.

    @In Debt: the way the EE bonds work, the purchaser pays half the face value, and it’s promised to accrue to full face value by term.

    @Jenna: No, I don’t need the money now, but it’ll only be redeemable for $500 cash in 20ish years which, thanks to inflation, will be equal to …?

    @mOOm: Thanks for doing the math 😉

    I’m happy with cashing this out and adding money to it to buy a bigger bond or CD. And you’re right, I’m after making life simpler.

Leave a Reply

CommentLuv badge

This website and its content are copyright of A Gai Shan Life  | © A Gai Shan Life 2018. All rights reserved.

Site design by 801red