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- 两种US saving bond – EE bond & I bond
- Benefit
- close to zero default rate (backed by US Treasury)
- Tax Benefit (no local/state tax)
- Downside
- No secondary market, can only cash-in/redeem
- Need 6-12 onth before cash-in
- In first five year, 3 months penalty for early redeem
- EE-bond vs. I-bond
- Series EE fixed rate, with principle guaranteed to double in maturity, Series-I bond change interest rate every six month
- Both max 10K investment per year per SSN
- Buy from Treasury Direct Online
- I-bond rate – based on fixed + variable rate
- Formula: Fixed + 2 * CPI_U + Fixed * CPI_U
- Combined rate not allowed to be negative
- I-bond 低通胀/经济差的时候收益差
- EE-bond held to maturity 会有更好的收益，但若不hold to maturity 可能收益更差(因为principle 不double)
- US saving bond vs. TIPS
- TIPS – not tax deferred
- TIPS has secondary market, no seasoning needed. Low CPI will value decrease, but US-saving bond guarantees the principal(保本).
- Tax deferred – meaning no tax until cash in
- 30 year maturity for I-bond, 20 year maturity for EE-bond.
- 教育基金的优惠 – waive federal tax if used towards EDU
- EE – bond 固定利率基于美国十年期国债