Do Savings Bond Lose Their Value With The Economy Slipping?

I have a small EE savings bond and was just wondering if it is going to be worth less than the paper it was printed on.

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5 Responses to Do Savings Bond Lose Their Value With The Economy Slipping?

  1. Jeff T says:
    July 28, 2009 at 5:24 pm

    No. The government has guaranteed the interest (as small as it is) and the principal payment (you will get your money back.)
    With savings bonds, the threat isn’t a recession, it’s inflation.
    If you buy a $25 bond, in 15 years you’ll be able to cash it in for $50.
    What will $50 buy in 15 years, who knows. That’s the inflation-risk.
    But if there’s a recession or deflation, that won’t hurt your bond.

  2. Cyclebum says:
    July 28, 2009 at 5:43 pm

    The only problem with a savings bond is it’s return may not keep up with inflation, and at maturity, the purchasing power may be less then when you bought it. Not likely, but possible.
    I bonds are indexed to inflation, plus pay a fixed rate. Unfortunantly, the fixed rate is currently 0% due to high demand, so all you’d get with these would be inflation protection, with no increase in purchasing power.

  3. what? says:
    July 28, 2009 at 6:00 pm

    no.
    firstly, savings bonds are non-marketable securities. once bought, they cannot be re-sold. this means that there is absolutely no market for savings bonds bonds, which in turn means that they cannot increase or decrease in value.
    secondly, the debt of the federal government (represented by your bonds) is basically completely free of default risk. and since it’s not marketable, the only other factor in computing the price of a bond (interest rates) can’t really affect the value of the bond, beyond whatever your variable coupon is.

  4. v b says:
    July 28, 2009 at 10:13 pm

    As the above poster stated, the EE savings bond is purchased at a discount. Use this website to determine the current value:http://www.treasurydirect.gov/BC/SBCPric…

  5. jlf says:
    July 28, 2009 at 10:14 pm

    It pays interest, good economy or bad.