How to Choose Series EE Bonds
Author: AliceTaylor Total views: 3 Word Count: 422
Series EE bonds are US savings bonds that are considered very safe investments. More people invest in Series EE bonds when the economy is bad (like it is today) and the market is unpredictable. Investors with low risk tolerance prefer to put money in series EE bonds than to risk it in the volatile stock market.
Like most bonds, series EE bonds pay interests. However, the interest rate of series EE bonds are very low compared to other fixed income investments. An example of what the interest rate on series EE bonds is 1.4% fixed rate paid in 2008. Fixed interest rates apply for series EE bonds purchased in May 2005 and after. Before that, series EE bonds paid interests based on current market rates.
Not only you can buy paper series EE bonds the traditional way, you can now buy electronic series EE bonds. You can buy series EE bonds online or at financial institutions or banks. Many companies also offer employees the ability to buy series EE bonds through payroll deduction.
Nowadays, many people take advantage of the availability of US savings series EE bonds online. When investing in series EE bonds, you can choose between electronic series EE bonds or paper series EE bonds. Paper series EE bonds start at $50 denomination whereas the smallest denomination of electronic series EE bonds is $25.
While paper series EE bonds are sold at 50% of their face value, electronic series EE bonds are sold at the full face value. That means, to buy series EE bonds online, you pay $50 for a $50 series EE bond whereas you only pay $25 for a $50 series EE bond certificate.
Series EE bonds, like other bonds, should be held long term. The shortest time you must hold series EE bonds is one year. After that you can redeem them. Interests on series EE bonds, however, accumulate for 30 years but early redemption is possible.
If you redeem series EE bonds early, there is a penalty. Most people hold series EE bonds for at least five years because if you redeem series EE bonds before 5 years then you will not receive the latest three interest payments. If you wait until the five year holding period is up, you will not incur penalties when redeeming series EE bonds.
Series EE bonds are great, solid, and safe investments that many investors hold in their portfolios. Their interest payments are fully guaranteed by the US government. Series EE bonds can be used for many purposes such as for education funding and retirement funding.
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Curious enough to learn even more about United States government savings bonds, or specifically the Series EE Bonds? Visit us at the US Savings Bonds resource site today for even more information and resources.
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