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I-Bond Fixed Rate Percentage
Old 09-26-2005, 04:00 PM   #1
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I-Bond Fixed Rate Percentage

Does the fixed rate % part of the bond ever change? If so what makes it change? Do interest rates going up effect it's yield? How so? I am not talking about the inflation index rate which changes with inflation.
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Re: I-Bond Fixed Rate Percentage
Old 09-26-2005, 04:03 PM   #2
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Re: I-Bond Fixed Rate Percentage

No, the fixed rate does not go up ... that's why its called "fixed".
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Re: I-Bond Fixed Rate Percentage
Old 09-26-2005, 04:11 PM   #3
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Re: I-Bond Fixed Rate Percentage

Well, the fixed rate for a given bond never changes. But the fixed rate for new issues changes every six months. I haven't seen them publish the algorithm, but it's probably based on the market average for 5-year TIPS. The 5-year real rate has inched up a bit (currently about 1.5%), so you'll probably see an increase in the fixed rate of i-bonds for the new issue in November.
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Re: I-Bond Fixed Rate Percentage
Old 09-26-2005, 05:40 PM   #4
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Re: I-Bond Fixed Rate Percentage

And buy them on the last* business day of the month: Your cash earns from the 1st and your bond earns from the first. 8)
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Re: I-Bond Fixed Rate Percentage
Old 09-26-2005, 06:43 PM   #5
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Re: I-Bond Fixed Rate Percentage

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Originally Posted by JPatrick
And buy them on the last* business day of the month: Your cash earns from the 1st and your bond earns from the first. 8)
Good tip!
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Re: I-Bond Fixed Rate Percentage
Old 09-26-2005, 06:53 PM   #6
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Re: I-Bond Fixed Rate Percentage

Yes, I realize it doesn't go up after you purchase it. I am talking about when they issue new bonds. What is that rate tied to that makes it go up or down?
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Re: I-Bond Fixed Rate Percentage
Old 09-26-2005, 07:38 PM   #7
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Re: I-Bond Fixed Rate Percentage

Some random imaginary number thats way too freakin low.
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Re: I-Bond Fixed Rate Percentage
Old 09-26-2005, 07:42 PM   #8
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Re: I-Bond Fixed Rate Percentage

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Some random imaginary number thats way too freakin low.
Blame the market. The real return is completely market driven. As I said, it's currently 1.5% for 5-year TIPS, and i-bonds are more-or-less 5-year TIPS, so I'm sure that's what the treasury uses to determine new issue rates (at least that's been true in the past).
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Re: I-Bond Fixed Rate Percentage
Old 09-26-2005, 09:48 PM   #9
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Re: I-Bond Fixed Rate Percentage

(), that is the % in addition to the CPI.
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Re: I-Bond Fixed Rate Percentage
Old 09-27-2005, 08:32 PM   #10
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Re: I-Bond Fixed Rate Percentage

OK then...some random imaginary number thats way too low, added to another imaginary number manipulated number that bears little resemblance to actual inflation
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Re: I-Bond Fixed Rate Percentage
Old 11-01-2005, 10:19 AM   #11
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Re: I-Bond Fixed Rate Percentage

I thought the fixed rate was due to be posted today, but it hasn't shown up on the Treasury web site yet?
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