Entering Savings Bond as CD versus zero-coupon bond


B

Bob

Why doesn't Money recommend entering a US Savings Bond as
a zero-coupon bond type of investment where the quantity
is the face value and the price is 50 (fifty percent of
face value)?

I have entered each of my savings bonds as a "CD or US
Savings Bond." Then I set the value to what I paid, 50%
of the face. I have recently added an "interest"
transaction to show the accumulated interest as well.
When I view my asset allocation all this show up
under "cash." Further, if I view my portfolio it does
not show the face value.

What is the harm in recording all of these as zero-
coupon "Bonds" instead? I could then see them in my
asset allocation separate from cash and CDs. Also, the
portfolio and reports would show the interest earned,
percent yield as well as full face value.

Does anyone have any advice out there on the most proper
way to record this type of holding?

Best regards,

Bob
 
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M

Michael Gordon, MVP

You're right, Bob -- US Savings Bonds can be treated as zero-coupon bonds --
that's what they are. The annual accretion could be treated as "reinvest
interest" and the account could be designated as tax-deferred or not
(depending on what elections are made). But they still would be entered at a
buy price of, in your example, 50. And portfolio would not show the face
value, which it shouldn't.
 
B

Bob

So if I follow Money's recommendation and enter the
savings bond as a CD, would the value field be the full
face value or 50% of the face? I've listed the value as
the price I paid and have an interest transaction for the
accrued amount. The portfolio shows what I paid plus the
interest. Is it more correct to, instead, set the value
to the full face value so the portfolio would show what
the bond would be worth when redeemed plus interest?

Thanks for all the advice,

Bob
 
T

Tagman

I enter the purchase at the purchase price.
I keep track of the specific individual details on the Savings bond wizard (treasury download)
Each month, I enter reinvented interest that the wizard calculates so that I reflect the current value of the bonds in total.
BTW - only one generic security in money.

Just my way of doing things...


So if I follow Money's recommendation and enter the
savings bond as a CD, would the value field be the full
face value or 50% of the face? I've listed the value as
the price I paid and have an interest transaction for the
accrued amount. The portfolio shows what I paid plus the
interest. Is it more correct to, instead, set the value
to the full face value so the portfolio would show what
the bond would be worth when redeemed plus interest?

Thanks for all the advice,

Bob
 
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M

Michael Gordon, MVP

I'm not sure which is "more correct" but I prefer that my portolio display
the current value.
 

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