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Grex > Agora46 > #48: The U.S. Savings Bonds & Treasury Securities Item | |
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| Author |
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eprom
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The U.S. Savings Bonds & Treasury Securities Item
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Jun 29 20:05 UTC 2003 |
This'll be the Savings Bonds & U.S Treasury Securities Item, Where we
can gossip about EE Bonds, HH Bonds, I-Bonds, T-Bills, and T-Notes!
Alot has changed over the past few year in regards to Treasuries:
-Savings bonds (both I & EE) now have a minimum holding period of a year.
(previously it was only 6 months)
-The HH Bond has dropped from 4% to 1.5% for the first time in 10 years.
-In Oct 2001 the Treasury suspended it issuing of Treasury Bonds, and is
now calling 30-year bond issued in 1978 in early.
Discuss.
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| 4 responses total. |
eprom
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response 1 of 4:
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Jun 29 20:10 UTC 2003 |
So a few weeks ago my mom sent me a EE savings bond that she had bought
in Dec 1989.
It had a face-value of $50, meaning she paid $25 for it back in 1989.
So I put all the info into the Savings Bond Wizard - a free program to
calculation the current price of U.S. Savings bonds - and it gives me
a current price of $53.94
interesting....
53.94 - 25 = $28.94 [earned in interest]
28.94/25 [ratio of interest to principle] = 115.76% ROI
115.76%/13.5 [yrs] = approx 8.57% APY
so I did a few more calculations for kicks.
EOY APY
1996 7.326
1997 7.56
1998 7.813
1999 8.064
2000 8.334
2001 8.607
2002 8.578
well I go to http://www.publicdebt.treas.gov/sav/savoldee.htm and it
says midway down on the page:
"Bonds with issue dates of November 1986 through February 1993 have a
guaranteed minimum rate of 6% per year, compounded semiannually, for
their 12-year original maturity period."
well the 12th year would have been Dec 2001. I guess from now on the
rate is gonna be base of the market-based rate - which is 85% of yields
of 5 year Treasury securities for the previous 6 months. Notice from
2001 to 2002 the avg yield went down?
Furthermore while the nominal APY is 8.5% APY, after calculating in the
cost of inflation ( http://data.bls.gov/cgi-bin/cpicalc.pl ), the Real
APY drops down to approx 5.021% APY.
115.76% [Nominal ROI] - 47.98% [CPI-U adj for 2003] = Real ROI 67.78%
67.78% / 13.5 = 5.021% Real APY
Not that I'm complaining. A real 5.02% kicks the crap out of a nominal
1% Money Market Account.
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ea
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response 2 of 4:
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Jun 30 02:34 UTC 2003 |
And now, you can buy bonds with a credit card. This practice has lead
to a plethora of interesting opportunities for those who have a 0%
introductory APR on their cards, and/or have rewards/cashback credit
cards
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gull
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response 3 of 4:
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Jun 30 20:01 UTC 2003 |
I have an old savings bond that was bought for me when I was born. It
reaches maturity after 30 years, so I'll cash it in shortly after I turn 30.
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spectrum
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response 4 of 4:
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Jul 6 00:01 UTC 2003 |
The current rate for EE bonds is 2.66% and is guaranteed to reach face value
in 17 years. The current rate for I bonds is 4.66% but it has no guaranteed
level of earnings since it is adjusted for inflation relatedd cost of living
expenses.
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