This is interesting in that EE bonds were in hibernation (being at 0.10% no matter what happened in the markets) from November 2015 through October 2022.i wonder how the treasury determines the 2.7% annual rate.EE bonds are useful for high earners who need more tax deferred space. They generate 2.7% annually (tax deferred) if you sell before 20 years. If you hold for 20 years, then you get 3.5% annually (tax deferred). But you aren’t required to hold for 20 years as many on this thread seem to imply.
In contrast, in 2008-2011 there were several opportunities to buy an EE bond with a rate above 1% despite zero interest rate policy FFR at the time. Yet during the interest rate cycle leading up to COVID, they never made it above 0.1%.
Should we go through zero interest rates/QE again, there could be another opportunity to grab an EE bond at the pre-economic crisis rate since it adjusts only every six months (the minimum one-year holding period aside) while the FFR crashes to zero in a matter of weeks.
Statistics: Posted by Makefile — Wed Oct 09, 2024 9:52 pm