US Savings Bond question

Major04 · #1 02-19-2009, 09:44 AM

Okay, all you financial wizards...since, I am getting hammered on this financial crazy world. My International stocks are not what they were used to. I am thinking of pulling some of that money and investing it to the US Savings Bond Market.

1) What is the difference between EE and I Bonds? I see that you have to hold them for at least twelve (12) months before it is redeemed.

2) Taxes when you redeemed the bond?

3) Maximum investment for $5K each totalling $10K in a single calendar year? or is it you can only hold $20K for a until you redeemed it? IDK

4) Is it a safer beat to put $20K in CDs or US Savings Bond?

Any help or educational helpful comments would be helpful...

Thank you and have a great day!

realchef · #2 02-19-2009, 10:09 AM

I'm no genius, but this seems to be pretty good advice someone gave me.

Once you sell, you actualize your losses. The market is a long term investment. If you can wait the 10 yrs til it corrects and begins to recover, you will be ok and potentially back on the profit track. Sell now and you remove all chance to recover.

If your invested companies are in danger of insolvancy, get out.

motordavid · #3 02-19-2009, 10:18 AM

Major, rather than my re-writing the info available, here are some
very good, succinct links on I vs EE Bonds:

-I vs EE comparo:
http://www.dfas.mil/navy2/investment...svsibonds.html
-Fed site on Bonds:
http://www.sec.gov/answers/savingsbond.htm
-Verf good site, but one must hit links to see I Vs EE, and has
handy bond interest calculator:
http://www.savingsbonds.com/

Short answers to your questions, imo:
1-EE offer a "fixed" interest return, re-set twice per year over the
life of the bond/length of time you hold them.

2-Both types of bonds are currently exempt from all state & local
taxes, but not Fed taxes. Fed taxes not due until bond is cashed or
at bond maturity end.

3-Current rule is $20,000 worth of each type, per person per year,
though one has to split the buys using electronic purchase for aprox
half of each species. There is no current limit on how many years'
worth of this total one can buy, though the annual total is down from
about $60Gs a yearish ago.

4-Safe? The "safest" investment on the planet is US backed bonds,
TBills, etc. Seldom the best paying, but literally the "safest", though
I don't lose any sleep over CDs, either.

I Bonds vs EE Bonds may offer you a slight advantage, as their interest
is re-set based upon US Gov't "inflation" rates; however, to complicate
the comparo, EE Bonds reset interest twice per year, also...

Strictly imo, TIPs bonds may be better than I Bonds, over the long haul,
as they sell on open mkt, usually offer a more appealing interest rate,
(albeit one set by the "mkt", not the Fed), etc.

TIPs, and many Fed bonds, are really instruments to hold in a tax deferred
acct., eg a 401K or IRA or Roth IRA, imo. TIPs and annual interest paying
instruments should/could be sheltered in that tax deferred account.

With all that said, I assume you are a fairly young man; thus, barring
the apocalypse, you have time on your side with all your investments.

I would not offer other advice or opins as I am not a registered CFA;
just a retired bum.
GL,mD

Major04 · #4 02-19-2009, 02:13 PM

RealChef - yeah I got almost the same advice as you awhile back too. Whenever I invest on something I always think it as long term.

And you should set up a web site for your culinary delights or book?...IMHO...be the next internet Chef.

mD - thank you for the web site, I will read up tonight. And for the "simple" explanation. I have made some great investment in my little time i.e Google when it went IPO and some others. But, it's just annoying to see the market go down and down and watch my hard earn money distributed by "our government," go to people, (IMHO) DONOT deserve it. I never looked at US Bonds and I believe that I should look at it, just to have a "little" money - just in case.

I am just lucky that I have a good job, to afford me the luxury to travel, spend, and help out some charity work in need.

Thank you very guys...I greatly appreciate your opinions...

enough said - When is Spring coming so, that I can go surfing and play with the sharks?

realchef · #5 02-19-2009, 04:48 PM

Quote:

Originally Posted by Major04

RealChef - yeah I got almost the same advice as you awhile back too. Whenever I invest on something I always think it as long term.

And you should set up a web site for your culinary delights or book?...IMHO...be the next internet Chef.

Thanks!

If we get together at a meet, I'll have to tell you about Jessica.