IS THERE a catch?
2007-02-09 15:16:09 · 6 answers · asked by Mr.Gifford 3 in Business & Finance ➔ Investing
No catch, but I would think twice about buying EE bonds. 3.6% is a mighty piddly return for a long-term investment. Taking inflation and taxes (when you finally cash them in) into account, they may not be worth any more in 30 years than they are today. If you're determined to go with savings bonds, go with I-bonds. If you were to buy them today, you'd at least be guaranteed a return of 1.5% over inflation.
2007-02-09 15:47:47 · answer #1 · answered by LongArm 3 · 0⤊ 0⤋
No, the only catch is that they take a long time to mature so that you get the full amount. The reason they are sold at a low rate is that while you are waiting for the bond to mature, the government is using your money right now.
2007-02-09 15:20:00 · answer #2 · answered by confuscious 4 · 0⤊ 0⤋
EE bonds are offered at 1/2 the face value by technique of convention. previous that, the face value is largely inappropriate. EE bonds will earn pastime each and each three hundred and sixty 5 days; once you redeem them, you'd be paid the present value for each bond (the unique quantity to procure them for plus the compounded pastime).
2016-11-26 20:38:33 · answer #3 · answered by Anonymous · 0⤊ 0⤋
This is probably a strip bond
a strip bond comes in Two parts
The bond itself that can not be redeemed til maturity
and the coupons, (yearly interest payments)
People buy the bond , keep the coupons for income and sell the bond at a discount, based on the interest rate today, for the length of time left, compared to the interest rate of the same length of time issued today.
It is a valid deal. I remember at one time yuou could buy a 100,000 dollar strip bond (25 yr) for $15,000
so if you bought 10 for $150,000, it would be redeemed for $1,000,000 in 25 years, but no payments before that time.
2007-02-09 18:48:08 · answer #4 · answered by bob shark 7 · 0⤊ 0⤋
No catch. You can buy "electronic EE Bonds" at their face value, if the half-priced thing makes you uncomfortable. You can read more at the government treasury bond web site at:
http://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds.htm
2007-02-09 15:22:02 · answer #5 · answered by Brad L 4 · 0⤊ 0⤋
the only catch is that you have to wait until the maturity to cash it in, you cant just buy it at half price and exchange it next month
2007-02-09 15:18:59 · answer #6 · answered by swenjj 4 · 0⤊ 0⤋