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EE Savings Bonds

Okay, so I was looking at information on EE Savings Bonds today. The website says you can purchase $5000 per calendar year. Is this for the person whose name the bond is in or for the household? Can kids "purchase" them (obviously we would use our credit card for this, but we want them linked to the kids' SSNs). We are looking at buying some for our kids, as well as for us for savings... We're a family of 6.

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Anonymous

Asked by Anonymous at 1:09 AM on May. 29, 2011 in Money & Work

Answers (8)
  • I believe it's that an individual can only have $5K on SB's put in their name a year. We have quite a few for DD and she is five. They are in her name AND one of our names. Kind of like a savings account you open for your kid...it's theirs, but yet it's yours too...
    AllAboutKeeley

    Answer by AllAboutKeeley at 1:24 AM on May. 29, 2011

  • Do you have to put a parent's name on the ones for the kids? I'm just curious if that counts towards our limit if we were to buy some for us when we buy some for our kids.
    Anonymous

    Comment by Anonymous (original poster) at 1:35 AM on May. 29, 2011

  • Do they have interest rates on them if so how much?
    mamaofficer

    Answer by mamaofficer at 1:53 AM on May. 29, 2011

  • I think they do. I know if you buy paper ones, you pay 1/2 price and after 5 years they are worth the full price (so, a $500 bond can be cashed in for $1000).
    Anonymous

    Comment by Anonymous (original poster) at 2:12 AM on May. 29, 2011

  • it is per social security number that the bond is linked too so it would be a limit of $5000.00 for each one of your kids and $5000.00 for yourself and for your husband. I will say the interest rate right now is so low it might be worthwhile to look into doing a roth IRA under you and your husbands name for the fact that interest rates are higher and you can also make penalty free withdrawls for things like college expenses and home purchases. If an emergency came up you can also take the principal out of your IRA without paying taxes on it because its your money and you've already been taxed on it. Also another perk is that if you don't need the money and end up waiting until retirement you get the money totally tax free as long as its been in the Roth for 5 years.
    mom2devin11005

    Answer by mom2devin11005 at 4:32 AM on May. 29, 2011

  • First off, why are you using a CC to pay for them? Do you not have the cash to pay for them outright or are you trying to earn some points but will pay off the CC immediately? If you're trying to be smart with money, that should be your first consideration.

    Also, something to keep in mind ... by the time the bonds mature and can be cashed in, you will be taxed on the increased value (if you paid $500 and cashed them in when they were worth $1,000, you will be taxed on the $500 you made ... may not matter for the kids' bonds but coupled with your other tax obligations, it may impact you if they are in your name/SS#. This was discussed on Suze Orman's show last night.
    Anonymous

    Answer by Anonymous at 7:28 AM on May. 29, 2011

  • My kids have tons of series EE bonds ... don't know what you're talking about them as far as maturing after 5 years ... theirs mature after 18 years.

    As far as purchasing them for yourself as a way of savings, it's one of the worst things to do to meet that goal. And if you're paying for them using your CC, then you obviously don't have the money to begin with. IRAs are a much better idea.
    Anonymous

    Answer by Anonymous at 7:31 AM on May. 29, 2011

  • My CC is my debit card, so yes, we DO have the money now. However, we were planning on purchasing them online, since we are stationed overseas due to the military, so we need to use the card. And not to be rude, but that wasn't my question.

    Thank you to those who answered the question of who it will be linked to. I will look into Roth IRA's as well.
    Anonymous

    Comment by Anonymous (original poster) at 2:54 AM on May. 30, 2011

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