questions about paper ee saving bond

[neil]

Recently I purchased the EE saving bond (Paper not Electronic).

My questions are:
1, How does treasury pay me the interest? I didn't leave my bank info when I submitted my order. So treasury will send me a check every month?

2, "EE bonds mature at 20 years after the purchase date. The government guarantees that mature EE bonds will be worth at least double the face value". This confuses me. I paid $5k for $10k face value bonds. So 20 years later I will get $20k?

[moda0306]

They accrue interest... it's not paid until you redeem the bond... luckily, it's not taxed until then either.

Regardless of the face value (confusing to people) of these bonds, the bonds will accrue the fixed stated interest rate (.6% right now) when you purchase them, but are guaranteed to double in value after 20 years at their "original maturity," leaving your bonds to be valued at $10,000.

They will, however, at that point continue to accrue interest at .6%, I believe.  Their actual maturity is 30 years... their "original maturity" doesn't mean the bond's done working at 20.

[neil]

I am thinking about convert my paper EE bond to electronic.

Regardless paper or electronic, the value after 20 years will be doubled. Then what's the benefit for having paper bonds?

(It looks like everyone on this board perfers paper bonds.)

[Storm]

I am thinking about convert my paper EE bond to electronic.

Regardless paper or electronic, the value after 20 years will be doubled. Then what's the benefit for having paper bonds?

(It looks like everyone on this board perfers paper bonds.)

I convert mine to electronic.  Paper has a lot of disadvantages, like if you lost them, or they burned in a fire.  I believe the US Treasury should still have some record of your bond, since it is tied to your social security number, so in a worst case scenario (all my bonds burned in a fire) you could still get them back.

Personally, I trust electronic more because I believe they're not going to lose those records.  I'm pretty sure that whenever you redeem a paper bond they verify it against the electronic copy anyway.

[moda0306]

The only thing worth holding in paper form nowadays is cash itself, and it's something I recommend in spades in this day and age (low interest rates on cash).

Almost everything else includes a rigamaroll if our electronic systems are damaged.

Can you imagine how effed things would be, even if you have a TD account, to actually get cash or a check out of it if the SHTF?  Do you think there are even enough employees and check-printing machines to get out all the requested cash funds out of those accounts in the event of crisis?  What about our post offices capability of delivering all those, possibly as well without their systems working fully?

As long as people believe the gov't will get a hold on things, they'll accept cash.  Of course, it'll be good to have all sorts of other short-term survival stuff in your home, but the point is that greenbacks will be #1 in terms of financial assets, if not gold.  If you have enough of those, get everything else electronic.