We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
Our Recent Essays Behind the Front Page
Sunday, September 6. 2009
What’s with this President, anyhow! Incompetent? Extremist? False G-d? Take your pick.
PowerLine has fits; we all should. “Remember how warmly Obama treated Gaddafi's pal Hugo Chavez. Maybe Obama, too, was taken aback by the fact that most Americans don't forget so easily when their countrymen are slaughtered by terrorists [the freed Lockerbie bomber]. As for Megrahi, one can only hope that the medical opinions that were bought [emphasis added;
Van Jones finally resigns, saying “"They are using lies and distortions to distract and divide." Heck, Jones, they’re your own extremist words that sunk you and you’re still spouting nonsense.
Gateway Pundit adds more: Obama Promised 600,000 Jobs This Summer-- Lost Nearly 1 Million Instead (Video) and lets not forget this from Obama: Obama Expands Relations With Communist Cuba-- Cracks Down On US Ally Honduras. Then,
Tops off to Topps. I don’t remember these trading cards from when I was a kid. If they’d had them then, I should have kept them.
Lunatic Mainstream. Mark Steyn wrote:
Pelosi loath to drop hammer on Rangel. Why? Politico reports because to Pelosi playing politics is more important than honesty.
Obama wants to help workers save by option of giving tax refunds in government savings bonds. Yea, that oughta work as well as the trillions of dollars of IOUs the Treasury owes Social Security that it hasn’t funds to pay.
Touchy, Touchy, Touchy, aren’t these despots? Arrested for T-shirts:
Hope you are planning a smokin’ Labor Day
Tracked: Sep 06, 09:16
Tracked: Sep 06, 09:20
Display comments as (Linear | Threaded)
Savings bonds aren't a bad deal, sort of a poor-man's 401k with no mandatory cash-in-at-70 age. They heavily limit how much you can buy in a year though so it doesn't show up as a real strategy. The I-bonds in particular, even though they pay 0.0% at the moment, owing to a CPI fall.
I grew up bringing 25-cents a week to school to buy Savings Bond stamps, adding up to a bond. No way again.
Are Your Savings Bonds Still Earning Interest?
If you own savings bonds, you may want to check their issue dates to find out if they're still earning interest. Depending on when you purchased your securities, it may be time to redeem them. Below are some guidelines that may help.
Savings Bonds No Longer Earning Interest:
E bonds through November 1965 that are more than 40 years old,
E bonds with December 1965 or later issue dates that are more than 30 years old,
H bonds that are more than 30 years old,
Freedom Shares (also known as Savings Notes) and
HH bonds that are more than 20 years old.
Series HH/H bonds pay interest on a semiannual basis, so it's easy to know when they stop earning interest. However, it's not always as obvious in the case of accrual securities like E bonds or Savings Notes – these simply stop growing in value.
This often comes as a surprise to savings bond owners. While all Treasury instruments are issued with an original term to maturity, maturity dates of savings bonds have been extended by as much as 30 years. Original maturity is the maximum amount of time it takes for a Series E/EE bond or Savings Note to reach face value. After your bond reaches original maturity, it automatically enters one or more extension periods (usually ten years long). This allows for additional earned interest but may create confusion for owners about when their bonds reach final maturity.
Holding onto a security that's reached its final maturity date means that your money is no longer earning interest. Why not redeem the matured security and put your money back to work for you? Even if the bonds aren't redeemed, regulations governing savings bonds require the interest income to be reported for Federal tax purposes for the year of final maturity, causing tax problems for unwary bond owners.
As a savings bond owner, you'll want to keep track of your bonds' issue dates and when they stop earning interest. You can always check them on our site at our page that discusses Treasury Securities that Have Stopped Earning Interest. While this article has addressed only savings bonds, you may also want to check the maturity dates of your marketable securities (Treasury bills, notes or bonds).
Series I Savings Bonds to Earn 0.00%, Series EE to Earn 0.70% Fixed Rate, When Bought from May 2009 Through October 2009
FOR RELEASE AT 10:00 AM
May 1, 2009
The Bureau of the Public Debt today announced an earnings rate of 0.00% for Series I Savings Bonds, and a fixed rate of 0.70% for Series EE bonds, issued from May through October 2009. Earnings rates for I bonds and fixed rates for EE bonds are set each May 1 and November 1. Interest accrues monthly and compounds semiannually. Bonds held less than five years are subject to a three-month interest penalty. Both series have an interest-bearing life of 30 years; the EE bond fixed rate applies to a bond’s 20-year original maturity.
I Bond Earnings Rate 0.00%, Fixed Rate 0.10%
The earnings rate for Series I Savings Bonds is a combination of a fixed rate, which applies for the life of the bond, and the semiannual inflation rate. The 0.00% earnings rate for I bonds bought from May through October 2009 will apply for their first six months after issue. The earnings rate combines a 0.10% fixed rate of return with the -5.56% annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U). When the inflation rate is less than zero, a bond's earnings rate is less than its fixed rate (but the earnings rate is never less than zero). The fixed rate applies for the 30-year life of I bonds purchased during this six-month period. The CPI-U decreased from 218.783 to 212.709 from September 2008 through March 2009, a six-month change of -2.78%.
Series EE Bonds Issued from May 1997 Through April 2005
Series EE bonds issued from May 1997 through April 2005 continue to earn market-based interest rates set at 90% of the average 5-year Treasury securities yields for the preceding six months. The new interest rate for these bonds, effective as the bonds enter semiannual interest periods from May through October 2009, is 1.64%. Market-based rates are announced effective each May 1 and November 1. A 3-month interest penalty applies to bonds redeemed before being held five years.
Matured Series E Savings Bonds and Savings Notes
Series E savings bonds continue to reach final maturity and stop earning interest. Bonds issued from May 1941 through May 1979 no longer earn interest. All U.S. Savings Notes (Freedom Shares), which were issued from May 1967 through October 1970, have also stopped earning interest. Series E Bonds with issue dates from June through October 1979 will reach final maturity during the next six months.
Earnings rates and actual yields for Series I and EE bonds can be found in Earnings Reports for the respective series on Public Debt’s website, www.treasurydirect.gov. The website also contains information and instructions for opening an on-line account to purchase electronic I and EE bonds, as well as Treasury marketable securities. Account holders can purchase, manage, and redeem electronic savings bonds over the Internet 24 hours a day, seven days a week. Detailed information about all Treasury securities, including savings bonds and marketable Treasury bills, notes, bonds and TIPS (Treasury Inflation Protected Securities), is available through www.treasurydirect.gov.
I think the "problem" with Savings Bonds is two fold:
1. Do people really know what they are getting if they sign up for it? Most people don't have a clue they have to wait 10-12 years for maturity, that interest rates are ridiculously low, etc. Full Notice should be required upon signing up.
2. There is no guarantee these bonds will have value if the current trends in the deficit and debt continue. In fact, it's totally within the realm of possibility that default is an option - will bondholders who sign up be informed?
Overall, I think the total package of changes announced along with the Savings Bond initiative is good. I know that, even if they are informed, some people will get Savings Bonds. I still get them for birthday gifts for kids, christening gifts, etc. They are an excellent tool to introduce savings to young folk.
In addition, some people just can't be bothered. And it's a good outlet for these lazy folk. To be honest, my brother in law used to use Savings Bonds as a "bank account". He used to have 15% of his income delivered in bonds each week. When asked when they mature, he said "6 months". He said this because he'd cash them in as soon as the interest provided some value - and he'd spend the money. But it was a form of deferred compensation. Otherwise he'd be living hand to mouth.
This kind of thing has its place. We have to recognize as "bad" an option as it is - it has some good effects.
I'm actually saying the overall announcement is a net positive for Obama. In light of all the other crap he's introduced, this is the first positive step toward alleviating the debt load we face - by encouraging saving and investment.
That said, it flies in the face of his "banks need to lend, people need to borrow" philosophy.
I concur, except in suspicion of O is that he also may favor allowing the government to "borrow" from people's IRAs and 401(k)s. I just don't want his nose further under the tent, as he starts with seemingly benign words that are transformed into raids on our lives.
"he also may favor allowing the government to "borrow" from people's IRAs and 401(k)s"
You are spot on here. I don't have the reference handy, but a Democratic Congressman last year was complaining about the $80 billion cost, meaning deferred tax revenue, to the government. He wanted to pass legislation ending the pre-tax deduction of 401(k) contributions.
Like many, I have made contributions to 401(k) plans. I am concerned about a couple of things.
First, could private savings be confiscated in exchange for a government run pension system? I expect this idea to be floated in the context of Social Security reform. It would be a way to confiscate the roughly $3 to $4 trillion in defined contribution plans. Think Argentina.
Second, the tax code can also be manipulated in a way to transfer much of what has been saved into government coffers. At the moment, I can't convert to a Roth IRA, pay the taxes and move on. It would be a move I would consider. Tax rates are going up.
A government that is broke will do the unimaginable to try to save itself.
Obviously, I don't trust politicians. It is an area to watch closely.
I am not a fan of an illiquid, long-term savings bond given the fiscal condition and outlook of the US government.