Date: Tue, 12 Apr 2005 10:35:13 CST
From: Rich Carreiro 
Newsgroups: misc.invest.financial-plan
Subject: Re: EE Bond purchase limit and changes question
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Sam  writes:

> It sounds like the Bonds purchased after May 1 will still be
> guaranteed to double in 20 years(i.e. a rate of 4%)

First, the rate is 3.53%, not 4%.  Second, you have to
hold the bond for at least 20 years for the guarantee
to have any value.  This is because the guarantee is
implemented as a one-time adjustment on the 20th anniversary
date of the bond.  If on the 20th anniversary the bond hasn't
doubled in value, the Treasury will make a bonus interest
accrual on the bond in whatever amount is needed to bring
the bond up to double its purchase value.

So if you hold for 19 years and 364 days you only get the
actual interest accrued so far, no matter how little it is.

> And when did the length of the period of time for the Bonds
> to double in value change? 

I believe it changes on 1 May 2005.  I'm pretty sure it's still
17 years until then.

-- 
Rich Carreiro                            rlcarr@animato.arlington.ma.us