Cash out my kids' EE bonds?

[Homerboy]

I'm an idiot. Ignore everything in italics.

Why my kids were born, we received a lot of US EE Bonds for them (~$1000 each kid). Now the bond are mature (kids are 9 and 7).

Lets take a $100 bond. (bought at $50, seven years ago). Now that bond is worth $100. Does it make sense to cash the bond out for $100 and re-buy $100 worth of bonds for them? (which will be double in 7 more years?) Or will that original $100 bond, purchased at $50 be worth $200 regardless in a total of 14 years life?

I guess the question I'm asking is, I know a bond matures in 7 years (doubling the purchase price). But does it double EVERY 7 years? Or should I be cashing out and rebuying for them to maximize return?

 

[vi edit]

Wow, they matured that fast? I thought it was 15 years. They'll keep accruing interest...but I don't know what the rate is. It stops accruing after a certain point (20 years?). Anywhoo...I had like $150 in bonds that were given to me at birth that I cashed out when I was 25. Walked away with like $650 from that. So they will double again. If not a third time even before they flatline in earnings.

 

[vi edit]

Another thing I didn't know...the wild disparity of maturity rates depending on the year purchased:

http://www.savingsbonds.com/bond_basics/ee-savings-bonds.cfm

 

[bignateyk]

Where the hell did you get a bond that doubles every 7 years? That's better than 10% interest. Or are these just hypothetical numbers?

But to answer your question, in true ATOT fashion, I have no idea.

 

[bignateyk]

Another thing I didn't know...the wild disparity of maturity rates depending on the year purchased:

http://www.savingsbonds.com/bond_basics/ee-savings-bonds.cfm

Interesting... I need to look into these.

edit: According to that, they are 20 years, which would only be like 3% interest. Unless I am missing something.

 

[Homerboy]

Another thing I didn't know...the wild disparity of maturity rates depending on the year purchased:

http://www.savingsbonds.com/bond_basics/ee-savings-bonds.cfm

LOL ah shit... I thought it was 7 (actually it seems to be 8) as I cashed a bunch of MINE that were purchased in that window. I had NO IDEA it fluctuated. I guess ignore my ignorant OP!!!

 

[vi edit]

I had NO IDEA it fluctuated. I guess ignore my ignorant OP!!!

Join the club, homey. I had no idea either until I googled that shit.

 

[Homerboy]

Join the club, homey. I had no idea either until I googled that shit.

Shit I feel bad now buying savings bonds for kids (newborns, baptisms etc). 20 years? Pfft when the kid is 20 in the year 2030 the $100 bond will buy him a loaf of bread.

 

[rcpratt]

Shit I feel bad now buying savings bonds for kids (newborns, baptisms etc). 20 years? Pfft when the kid is 20 in the year 2030 the $100 bond will buy him a loaf of bread.

I used some of my childhood bonds to buy a plasma TV (half of it was an xmas present) this year. I still have about half left, probably.

 

[Homerboy]

I used some of my childhood bonds to buy a plasma TV (half of it was an xmas present) this year. I still have about half left, probably.

Those childhood bonds matured a lot faster than 20 years though.
I cashed a bunch of mine in too some time ago... for something... I have no idea what at this point.

 

[rcpratt]

Those childhood bonds matured a lot faster than 20 years though.
I cashed a bunch of mine in too some time ago... for something... I have no idea what at this point.

I'm pretty sure they were 15 or 20 years...7 or 8 sounds ridiculous. I don't know, they were from '88-'90ish so I'm too lazy to figure it out.

edit: Eh, I looked it up. My $500 ($250 face) bond I got at birth ('88) was worth $740.40 in January of this year. So...22 years, doubled 1.5 times. That makes the doubling time...14 or so years? Corresponds to a rate of 5 or so percent. That's not the one I cashed though, I cashed a few smaller ones.

 

[rudder]

I cashed my childrens bonds out... it was tough deciding if a better rate than the 1.5% they were getting could be had. I finally took the plunge, cashed them in and regretted it ever since.

 

[vi edit]

The one perk that EE bonds have is that you don't pay federal taxes on the interest earned if you use it for school. But yeh, I feel like a dumb ass too because my 2.5 year old is sitting on a couple grand of them that won't mature until she's a Junior or Senior in college. So she could cash them out and buy like...a text book and pack of pencils with them.

I never checked the fine print when they were issued. I thought it was 15 years too...not 20.

 

[Homerboy]

The one perk that EE bonds have is that you don't pay federal taxes on the interest earned if you use it for school. But yeh, I feel like a dumb ass too because my 2.5 year old is sitting on a couple grand of them that won't mature until she's a Junior or Senior in college. So she could cash them out and buy like...a text book and pack of pencils with them.

I never checked the fine print when they were issued. I thought it was 15 years too...not 20.

Its even worse than 20 years. I plugged a 7/01 $500 bond into their calculator. Maturity date is 2031!!!! I blame Bush!

 

[thegimp03]

Heh, I have almost 40 savings bonds that were given to me from the early-80's though the mid-90s. Most of them are 4% bonds but a few pay at a lower rate. I've been out of college for 5 years and the earliest that one of them matures is in 2013, and the latest that one matures is in, get this, 2029! I will have been out of college almost 25 years by then. I'm guessing that one can go towards my future kids' college tuition.