See some chater lately that this is a good time to snag more I bonds.

I have a bunch of EE's back to the 90's avg 4.0 % on the last calc..Would this be a good time to turn those into I bond(s)

Leme know oh wise ones

You are guaranteed a return on your EE bonds, not I Bonds.  There is a guaranteed minimum return if held to maturity.  What is yours?  I have forgotten what the minimum was for yours might be.

If you buy I Bonds now, before May 1 you will earn a fixed rate of 1.2% plus the inflation component.  Presently the  return is  4.28%.  The next fixed rate is likely to be lower than 1.2%, but I cannot say if it will be lower...or higher.

If you sell your EEs now, you will pay federal income taxes on the gain.  Is it worth it for you?   I would not want to tell you what you should do.  Run your calculation and get out your crystal ball.  (I can say that I sold my old EE bonds 3 or 4 years ago or so for I Bonds,  but I am retired and my income taxes are miniscule.)

Jim

Jim 

[quote user="phoneguy"]thanks fer the info...All but 1(3.72) are 4.0.Guess I will hang on to em.Dont need the $ so I will continue to for get about it.[/quote]

You need to make sure to redeem them once they've reached final maturity, (Uncle Sam wants his taxes, and they're due, even if you fail to redeem your bonds!).

Regards,

Mel

[quote user="phoneguy"]thanks fer the info...All but 1(3.72) are 4.0.Guess I will hang on to em.Dont need the $ so I will continue to for get about it.[/quote]

You need to make sure to redeem them once they've reached final maturity, (Uncle Sam wants his taxes, and they're due, even if you fail to redeem your bonds!).

Regards,

Mel

[/quote]

Thanks Mel.....Will do 2/2020 is the start I got some wiggle room..If I can still wiggle!!

I am curious about your comment, "I Bonds are not guaranteed a return?"  Pardon my ignorance, but aren't I Bonds issued by the US Governemnt?

 Would you invest now in I Bonds if you were going to retire in a year or two and hold them thereafter?

Looking for some  more fixed income instruements.

Thanks for any input. 

I am curious about your comment, "I Bonds are not guaranteed a return?"  Pardon my ignorance, but aren't I Bonds issued by the US Governemnt?

 Would you invest now in I Bonds if you were going to retire in a year or two and hold them thereafter? [/quote]

This was meant as a comparison between I and EE bonds..    Yes,  both are issued by the US.  EE Bonds have a guaranteed return if held to maturity with new issues today earning  3.0%.    I Bonds do not have a guaranteed total return.  I Bonds have a variable return with a 1.2% fixed component plus an inflation component.   The inflation component changes every six months.  New I Bond issues today earn 4.28%.   If inflation rises,  I Bonds will earn more.  If we have deflation then I Bonds would earn less.  I prefer I Bonds though.

 I Bonds are safe and give your savings inflation protection.   Remember this though for short term needs, on both I Bonds and EE Bonds.  you cannot redeem them in their first year, and there is a 3 month interest penalty if held less than five years. 

Purchased today the fixed portion for I Bonds is 1.2%.   If you purchase in May the fixed portion may be less or more.   Many believe that the Treasury will lower the fixed portion when new rates are announced on May 1.  If I was considering buying more I bonds I would purchase before May 1 because I am one who believes it is likely that the fixed portion will be lower then.   I could be wrong though.  Regardless, the inflation component will be there for all old and new issues.

I hope this helps you.

Jim  

I wouldn't be so quick to cash in older EE bonds. Older EE bonds generally had better terms than the current ones, and some much so.

Revently, EE bonds went to a fixed income format. These bonds are not a good deal in the current interest rate environment, and so if you bought EE bonds after April 2005, I think those are the ones to sell.

 However, if your EE purchase was before April 2005, I suggest to go to the Treasury Direct website and look up the terms of those older bonds. Some of those bonds have floors of 4% or even 6%. Those are good rates in today's environment, regardless of how well the I-bonds look.

 I would purchase I-bonds with new money or money proceeds from the sale of EE bonds purchased after April 2005. I'd be inclined to keep the rest of the EE bonds until you want to spend the money, or until they reach final maturity.

Steve

However, if your EE purchase was before April 2005, I suggest to go to the Treasury Direct website and look up the terms of those older bonds. Some of those bonds have floors of 4% or even 6%. Those are good rates in today's environment, regardless of how well the I-bonds look.

[/quote]

What EE Savings Bonds have a current rate floor of 6%?

Ones issued slightly less than five years ago have a current rate of 6.23% because they are losing the three month interest penalty due to turning five years old.

Pat, in response to your question above, here is a statement from the Treasury Direct website regarding older EE savings bonds:

Guaranteed minimum rates were set at the time a bond was issued. Initially, they apply to a bond's original maturity period and are subject to change as a bond enters an extended maturity period. In its extended maturity period, the bond's guaranteed minimum rate becomes the minimum in effect at that time for new issues. The guaranteed minimum rates are:

• 4% for bonds issued March 1993 - April 1995
• 4% for bonds entering an extended maturity period since March 1993
• 6% for bonds issued or entering an extended maturity period between November 1986- February 1993
• 7.5% for bonds issued or extended from November 1982-October 1986

Pat, in response to your question above, here is a statement from the Treasury Direct website regarding older EE savings bonds:

[/quote]

Perhaps, I need to emphasize a word in my question: what EE Savings Bonds have a current rate floor of 6%?

"Some of those bonds have floors of 4% or even 6%. Those are good rates in today's environment."

My question was what ones were earning 6% in today's environment.  As far as I can tell there are none for which the guaranteed minimum of 6%  applies today.  EE Saving Bonds of what issue date currently have a rate floor of 6%?

You ask a good question Pat, and you are keeping me honest by forcing me to do my homework.

According to the TD statement above, EE bonds entering an extended maturity period in February 1993 would get a guaranteed floor rate of 6%.

Now, my job is to investigate when a bond like that would have been issued. The question here is, would such a bond still be earning interest? I need to research that. Stay tuned.

Steve

All unredeemed EE bonds are still earning interest.  The first ones were issued in January 1980 and have not yet completed their total maturity period of 30 years.

Start with the quote you gave about the guaranteed minimum rate beings "6% for bonds issued or entering an extended maturity period between November 1986-February 1993".

First, look at the bonds issued between November 1986-February 1993.  They had an original matruity period of 12 years.  They entered their first extended maturity period between November 1998-February 2005 and are currently covered by the "4% for bonds entering an extended maturity period since March 1993" guarantee.

Second, look at the bonds that entered an extended maturity period between November 1986-February 1993.  They did so during their first extended maturity period with a term of 10 years.  They have since entered their second extended maturity period and are currently covered by the "4% for bonds entering an extended maturity period since March 1993" guarantee.