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Now that we can only get savings bonds online (face value question)
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lulugrrl
My 3 Blessings
Member since 3/06 6551 total posts
Name:
L
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Now that we can only get savings bonds online (face value question)
So the banks do not have savings bonds anymore (there goes my standby gift for all occasions)
I know you can buy them online at treasury direct. But it looks like you buy a $25 bond for $25. they are not half face value like they were in the bank. What is up with that? Or am I just misinformed? Whats the purpose of a bond then? help?
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Posted 12/19/11 3:01 PM  |
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Pumpkin1
LIF Adult
Member since 12/05 3715 total posts
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Re: Now that we can only get savings bonds online (face value question)
Really? I just got one a couple of weeks ago for my son's baptism.
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| Posted 12/19/11 3:14 PM |
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jam11308
Member since 11/07 7273 total posts
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Re: Now that we can only get savings bonds online (face value question)
When did this happen? We just purchased one about a month ago from our bank...
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| Posted 12/19/11 3:15 PM |
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MrsA714
Baby #2 is here!
Member since 8/07 8806 total posts
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Re: Now that we can only get savings bonds online (face value question)
Make sure you are looking at the right series. There are different series. I believe the EE series are the ones you get double the value and the I series you pay face value. I don't know all the differences but they mature differently I think.
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| Posted 12/19/11 3:16 PM |
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Shroggie
Don't Worry...Be Happy
Member since 5/06 6261 total posts
Name:
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Re: Now that we can only get savings bonds online (face value question)
You were probably looking at the Series I bonds, whereas you usually buy the Series EE bonds.
Starting Jan 1st, bonds will need to be purchased by Treasury Direct .
Message edited 12/19/2011 3:34:52 PM.
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| Posted 12/19/11 3:34 PM |
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lulugrrl
My 3 Blessings
Member since 3/06 6551 total posts
Name:
L
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Re: Now that we can only get savings bonds online (face value question)
Yes, Jan. 1 is when this will take effect, sorry I did not clarify. This is from treasury Direct (about the face value of E-bonds)
Buying Electronic EE Bonds
•Sold at face value; i.e., you pay $50 for a $50 bond and it's worth its full value when it's available for redemption.
•Purchase in amounts of $25 or more, to the penny.
•$5,000 maximum purchase in one calendar year.
•Issued electronically to your designated account.
Buying Paper EE Bonds
•Sold at half their face value; i.e., you pay $25 for a $50 bond but it's not worth its face value until it has matured.
•Purchase in denominations of $50, $75, $100, $200, $500, $1,000, and $5,000, and $10,000.
•$5,000 maximum purchase in one calendar year.
•Issued as paper bond certificates.
If you redeem EE/E Bonds in the first 5 years, you'll forfeit the 3 most-recent months' interest. If you redeem them after 5 years, you won't be penalized.
Who Can Own Bonds
I don't know, I just liked giving a $50 bond gift to people that I would normally only spend $25 on. At least when the child is grown, he would have a nice $ amount to cash in.
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| Posted 12/19/11 3:55 PM |
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GoldenRod
10 years on LIF!
Member since 11/06 26792 total posts
Name:
Shawn
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Re: Now that we can only get savings bonds online (face value question)
http://www.savings-bond-advisor.com/paper-vs-treasurydirect/
Series EE Savings Bonds purchased electronically at TreasuryDirect are issued at face value…$50 for a $50 bond. Paper bonds are issued at half their face value. Why is this done? Will the electronically issued bond be worth less in the future than a paper bond?
Tom's response
When Series EE bonds were first issued, one of the things used to create excitement about them was they reach face value is just X years. The X has been as low as 8, but it's currently 20, which doesn't create much excitement.
The number of years it takes to reach face value depends on the prevailing level of interest rates.
Meanwhile, in the context of TreasuryDirect, it simplifies things a great deal to get rid of the idea of a "face value" that's different from both the "original investment" and the "current redemption value". These are the values you see on TreasuryDirect.
Nonetheless, TreasuryDirect EE bonds are guaranteed to double in value in 20 years, just like the paper ones. The return is exactly the same.
So, you would still buy them a $25 bond, and it would still mature at the same rate, and be worth $50 in 20 years, the same as before, but the "face value" is different, not the value or rate of return.
Message edited 12/19/2011 4:31:58 PM.
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| Posted 12/19/11 4:30 PM |
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lulugrrl
My 3 Blessings
Member since 3/06 6551 total posts
Name:
L
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Re: Now that we can only get savings bonds online (face value question)
Series EE Savings Bonds purchased electronically at TreasuryDirect are issued at face value…$50 for a $50 bond. Paper bonds are issued at half their face value. Why is this done? Will the electronically issued bond be worth less in the future than a paper bond?
Tom's response
When Series EE bonds were first issued, one of the things used to create excitement about them was they reach face value is just X years. The X has been as low as 8, but it's currently 20, which doesn't create much excitement.
The number of years it takes to reach face value depends on the prevailing level of interest rates.
Meanwhile, in the context of TreasuryDirect, it simplifies things a great deal to get rid of the idea of a "face value" that's different from both the "original investment" and the "current redemption value". These are the values you see on TreasuryDirect.
Nonetheless, TreasuryDirect EE bonds are guaranteed to double in value in 20 years, just like the paper ones. The return is exactly the same.
So, you would still buy them a $25 bond, and it would still mature at the same rate, and be worth $50 in 20 years, the same as before, but the "face value" is different, not the value or rate of return.
Ohhh, Thank You for clearing that up..
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| Posted 12/19/11 5:00 PM |
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Mill188
LIF Adult
Member since 3/09 3073 total posts
Name:
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Re: Now that we can only get savings bonds online (face value question)
Series EE Savings Bonds purchased electronically at TreasuryDirect are issued at face value…$50 for a $50 bond. Paper bonds are issued at half their face value. Why is this done? Will the electronically issued bond be worth less in the future than a paper bond?
Tom's response
When Series EE bonds were first issued, one of the things used to create excitement about them was they reach face value is just X years. The X has been as low as 8, but it's currently 20, which doesn't create much excitement.
The number of years it takes to reach face value depends on the prevailing level of interest rates.
Meanwhile, in the context of TreasuryDirect, it simplifies things a great deal to get rid of the idea of a "face value" that's different from both the "original investment" and the "current redemption value". These are the values you see on TreasuryDirect.
Nonetheless, TreasuryDirect EE bonds are guaranteed to double in value in 20 years, just like the paper ones. The return is exactly the same.
So, you would still buy them a $25 bond, and it would still mature at the same rate, and be worth $50 in 20 years, the same as before, but the "face value" is different, not the value or rate of return.
This exactly. The half of face value thing was a marketing tool when the Series EE first came out. It was a stroke of genius too. However, the bonds mature at the same rate. A paper $25 dollar will be worth $50 in 20 years. A $25 dollar electronic bond is worth $25 the day you buy it. In 20 years, it will be worth $50.
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| Posted 12/19/11 5:02 PM |
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