how do us savings bonds work?
by admin ~ September 12th, 2006 . Filed under: Investing .
Mia l asked:
I have no clue, I have never purchased one……..
Any and all info is appreciated!
Chelsea Licon
I have no clue, I have never purchased one……..
Any and all info is appreciated!
Chelsea Licon
September 15th, 2006 at 4:41 am
You buy them at half their face value and over the next 7 years they mature to full value
September 18th, 2006 at 2:22 am
Thumbs down on the above answer. There are two kinds of savings bonds. Only EE bonds are purchased like the above. I Bonds are usually purchased at face value unless they are zero-coupon bonds, then at maturity the face value is returned to you. Over the duration of the bond, you collect the interest payments made. Check out the article below.
September 20th, 2006 at 10:20 am
If you are buying “EE” bonds - there is a website that will give you some info.
If you received one as a gift - the person who bought it and gave it to you paid 1/2 the face value ($50.00 for a $100.00 bond, etc.).
Over a period of time - usually about 7 years (though this can change) the bond changes in value (goes up above the original $50.00) until it is worth $100.00.
After that time period - the value continues to increase for many years.
If you “cash in” early you will receive a little more than 1/2 the face value or even less - there is an early “cash-in” penalty where you lose interest - even if you did not earn it yet.
If you plan to buy one of these for yourself or for someone as a gift - the above description is still true.
September 23rd, 2006 at 3:46 am
i think they have an interest reach & they mature over a period of time then you can cash them.