claus@inuxd.UUCP (David Claus) (05/10/84)
-- I have a question about how intersest is computed on the EE Series US savings bonds that are available through payroll deduction. After you hold the bond over 5 years and then decide to cash it, do you receive 85% of the treasury rate for every year you have held the bond or do you receive 5.5%, 6.0%, 6.5%, 7.0%, and 7.5% for years 1 through 5 and then 85% of the treasury rate for every year after the fifth. This can make a big difference in the final value of the bond, and I haven't been able to figure which is correct. Does anyone know for sure? Thanks, Dave Claus AT&T Consumer Products/Indy
stanwyck@ihuxr.UUCP (Don Stanwyck) (05/17/84)
The interest on the savings bonds are accumulated at the 85% of treasury bond rates from the beginning. What happens, in effect, is that you pay an interest penalty for cashing them in less than 5 years + 1 day. That penalty is that the interest on the bond is recalculated to a straight per annum rate determined by the length of time that you held the bond. Once you reach the 5 year + 1 day point, interest is paid as though it had always received the 85% rate. -- ________ ( ) Don Stanwyck @( o o )@ 312-979-3062 ( || ) Cornet-367-3062 ( \__/ ) ihnp4!ihuxr!stanwyck (______) Bell Labs @ Naperville, IL