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Does anyone still have savings bonds?

October 14th, 2014 at 12:18 am

I own 52 EE US Savings Bonds. They earn mostly 1.42% interest. I earn a total of about $4.00 per month on these savings bonds. I am trying to decide if it is worth it to keep them. I could just cash them in and put the money in my ING ( Capital One) savings account and earn .75%. The difference is about $20.00 a year. Not much difference and I would have one less account to keep track of.....not that it is really much trouble! LOL


What would you do?

Posted in Personal Finance | 4 Comments »

4 Responses to “Does anyone still have savings bonds?”

  1. Carol Says:
    October 14th, 2014 at 02:13 am 1413252799
    1413252799

    If you keep them until they mature (admittedly, a log time, 30 years I think), they really earn more. Yes, we still have some and yes we kept some till they matured. They came in handy in the first years of retirement.

  2. Carol Says:
    October 14th, 2014 at 02:14 am 1413252840
    1413252840

    Sorry, that's long time.

  3. scfr Says:
    October 14th, 2014 at 10:57 am 1413284274
    1413284274

    When were they purchased? EE Savings Bonds purchased May 2005 or later are guaranteed to double in 20 years, which is the equivalent of 3.5%. (A one-time adjustment is made at 20 years if needed.) Here is a link to that info on the Treasury Direct web site: http://www.treasurydirect.gov/indiv/research/articles/res_invest_articles_newratestructure_0405.htm

    I have some that were purchased after May 2005 (in fact, I just purchased some more) that I plan to keep for 20 years. Of course, I have the option of cashing them in earlier if interest rates really take off.

    In your shoes (since you have no debt and the alternative is a lower-interest savings account), I'd probably keep them, especially if they were purchased May 2005 or later.

    Also keep in mind that there may be tax advantages if you use them to pay for college expenses.

  4. scfr Says:
    October 14th, 2014 at 11:01 am 1413284500
    1413284500

    I should add that while the bonds I own will earn interest for 30 years, the 20-year point right after they are adjusted to double in value, may be the "sweet spot" for cashing out for me.

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