Happen to cash in some "mature 30yr" EE savings bonds from when I was a kid. The bank person mentioned that she still does some I-series bonds. Went and looked..... wonder how these compare to other fixed income vehicles ?
Older I-bonds, such as those issued when they first came out in 1998, pay yields that today are hard to find in such a conservative investment. As you probably read I-bonds pay a base interest rate, plus an inflation adjustment based on the consumer price index (CPI). In the first few years the base rate was over 3%, but today it's a whopping...0%. All you have is the inflation adjustment.
Your 30-year bonds probably did quite well, based on the rates paid in that era (was that one with a 6% minimum rate?). And the interest was all tax-deferred along the way. I have to question, though, who would buy an E-bond today, which currently pays a fixed 1.4%. The federal government seems to be trying to discourage the purchase of savings bonds, by paying such low rates. It's a costly program, compared to raising money by selling large-denomination Treasury bonds.
-Tad
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Not to mention limiting purchases to $5K/yr per series (I or E) per person per type (paper or electronic).
-- Rich Carreiro snipped-for-privacy@rlcarr.com
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thanks - I don't know what I was reading concerning the I-bond, but I didn't even see the rates - must be going blind !
ahhh - it was here - the 4.84% "headline" caught my eye -
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Can one buy them online as well as get the paper ones and then use smartexchange to convert the paper ones to the online version? If so, it doesn't seem to make sense. Why would they just not limit it to $10K/year regardless of what medium is used to purchase them.
Anoop
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