Classwork #6 3/17/10

1)what is the current interest rate on EE bonds purchased today?
According to savingbonds.com the current interest rate for EE bonds purchased November 1st 2009 to April 30th 2010 is 1.20%

2)Explain the advantages of purchasing bonds
The interest on EE saving bonds can be reportable for Federal income tax the year they are redeemed and the interest you earn is exempted from state and local taxes. When you purchase a bond your money is guaranteed to be safe as your investment is to the U.S. so as long as the country stands so does your money.

3)Which would you prefer to buy one I bond or one EE bond?
We would prefer to buy an I bond because I bonds are protected against inflation and in the current economic state that we are in, inflation is a threat. When you buy a $100 I bond it is valued at $100 whereas if you buy a $100 EE bond it is valued at $50.

4)Why must you wait until the bond matures before you redeem it?
You must wait until the bond matures because if you cash in a bond before five years you receive your money back but a three month penalty.