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04-29-2007, 05:56 AM
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#1
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Recycles dryer sheets
Join Date: Oct 2003
Location: Combined Locks
Posts: 89
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I-bond rate for May 1st
New 6-mo rate coming out on May 1st..Inflation on the rise...your thoughts on what the new rate might be...hopefully better that the 4% plus that they are now...otherwise cash in ??
__________________
RJ
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Re: I-bond rate for May 1st
04-29-2007, 06:04 AM
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#2
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Recycles dryer sheets
Join Date: Sep 2005
Posts: 101
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Re: I-bond rate for May 1st
For old and new I-Bonds the inflation part will be 2.42 so if the fixed portion of your existing I-Bonds is 2% the new rate will be 4.42%
No one knows what the fixed part of new I-Bonds issued in May will be until it is announced in May, but if it is 2% (doubtful) the rate for new I-Bonds will be 4.42%
I have a lot of I-bonds with the fixed rate of 1% so the new rate for these bonds will be 3.42% (I will be cashing them in)
Jim
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Re: I-bond rate for May 1st
04-30-2007, 09:35 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2006
Posts: 7,733
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Re: I-bond rate for May 1st
I have modest number of Ibonds with a 3.4% or 3.6% real rate. I think I am going to be keeping those for a long time.
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Re: I-bond rate for May 1st
05-01-2007, 08:15 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Re: I-bond rate for May 1st
Quote:
Originally Posted by clifp
I have modest number of Ibonds with a 3.4% or 3.6% real rate. I think I am going to be keeping those for a long time.
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Why??
3.4-3.6% isn't that good of a rate these days...........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
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Re: I-bond rate for May 1st
05-01-2007, 08:31 AM
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#5
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Thinks s/he gets paid by the post
Join Date: Dec 2003
Posts: 1,375
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Re: I-bond rate for May 1st
Quote:
Originally Posted by FinanceDude
Why??
3.4-3.6% isn't that good of a rate these days...........
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3.4 and 3.6 plus inflation aint bad.
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Re: I-bond rate for May 1st
05-01-2007, 08:46 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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Re: I-bond rate for May 1st
Hey Clif, I'll trade you some ISM for those 3.6% ibonds...
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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Re: I-bond rate for May 1st
05-01-2007, 08:46 AM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Re: I-bond rate for May 1st
Quote:
Originally Posted by Jarhead*
3.4 and 3.6 plus inflation aint bad.
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Depends on which number you believe from the govmint...........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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Re: I-bond rate for May 1st
05-01-2007, 08:47 AM
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#8
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Recycles dryer sheets
Join Date: Nov 2003
Location: Charlotte
Posts: 360
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Re: I-bond rate for May 1st
New fixed rate is 1.3 and inflation % is 2.42. That makes Jarhead's (and My!) 3.4 and 3.6 bonds pay 5.82 and 6.02 for next six month cycle.
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Re: I-bond rate for May 1st
05-02-2007, 06:28 AM
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#9
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Recycles dryer sheets
Join Date: Oct 2003
Location: Combined Locks
Posts: 89
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Re: I-bond rate for May 1st
A lot of my bonds will be earning around 3.53% for the next
6 months,,,not true as I'm cashing in and buying some 9-mo cd's
@ 5.25%, will eat the 3 month lost interest, but I always wanted
to say to the goverment---(YOUR FIRED!!!!!!!!!!!!!!!!!)
__________________
RJ
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Re: I-bond rate for May 1st
05-02-2007, 07:42 AM
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#10
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Recycles dryer sheets
Join Date: May 2006
Posts: 230
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Re: I-bond rate for May 1st
Quote:
Originally Posted by rjk514
but I always wanted
to say to the goverment---(YOUR FIRED!!!!!!!!!!!!!!!!!)
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Just pay close attention to the timing of your sale and when the rates change on your bonds. I sold some lousy 2003 I-bonds (1.1 fixed I think) but waited until I had finished collecting through a good inflation period and then sold when the penalty interest being forfeited was during a low inflation period -- something like 2.2% total. If you search threads here and calculate the interest accruing on your bonds on the first of the month you will be able to figure out the best time to sell. Explanations on this are never very clear so I'd recommend looking at your interest and calculating the return yourself so you know exactly when the rate changes and which rate you are giving up.
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Re: I-bond rate for May 1st
05-02-2007, 07:56 AM
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#11
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Recycles dryer sheets
Join Date: Nov 2003
Location: Charlotte
Posts: 360
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Re: I-bond rate for May 1st
Good advice from Terminator. I just finished using the Savings Bond Calculator to calculate June-November interest updates for our I Bonds to update our Quicken data. Changes in I Bond rates are staggered based on the date they were issued; i.e., an October issue won't be picking up the new rates until November.
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Re: I-bond rate for May 1st
05-02-2007, 09:36 AM
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#12
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Dryer sheet aficionado
Join Date: Oct 2006
Posts: 39
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Re: I-bond rate for May 1st
I have modest number of Ibonds with a 3.4% or 3.6% real rate. I think I am going to be keeping those for a long time.
You should NEVER, EVER, NEVEREVER sell those bonds. Where else can you a risk-free investment wiht 3.4% real returns?
- M
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Re: I-bond rate for May 1st
05-02-2007, 10:26 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Sep 2006
Posts: 1,691
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Re: I-bond rate for May 1st
Quote:
Originally Posted by terminator
Just pay close attention to the timing of your sale and when the rates change on your bonds. I sold some lousy 2003 I-bonds (1.1 fixed I think) but waited until I had finished collecting through a good inflation period and then sold when the penalty interest being forfeited was during a low inflation period -- something like 2.2% total. If you search threads here and calculate the interest accruing on your bonds on the first of the month you will be able to figure out the best time to sell. Explanations on this are never very clear so I'd recommend looking at your interest and calculating the return yourself so you know exactly when the rate changes and which rate you are giving up.
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In addition if you going to RE soon, like next year (and changing to a lower tax bracket),
might also wait till next year to reduce tax liability.
TJ
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Re: I-bond rate for May 1st
05-02-2007, 02:17 PM
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#14
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Recycles dryer sheets
Join Date: Nov 2005
Posts: 195
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Re: I-bond rate for May 1st
I have some I-Bonds, paying a real rate of 3.0%. With the new inflation rate of 2.42%, I calculate my interest rate at 5.42%.
Savings Bond calculator indicates my interest rate is 6.15%. What is it, that I'm missing? What accounts for the difference?
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Re: I-bond rate for May 1st
05-02-2007, 02:40 PM
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#15
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Recycles dryer sheets
Join Date: May 2006
Posts: 230
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Re: I-bond rate for May 1st
Quote:
Originally Posted by Sundance Kid
I have some I-Bonds, paying a real rate of 3.0%. With the new inflation rate of 2.42%, I calculate my interest rate at 5.42%.
Savings Bond calculator indicates my interest rate is 6.15%. What is it, that I'm missing? What accounts for the difference?
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Probably because that was/is the rate for the previous period (3% fixed + 3.1% inflation). If you're within five years of purchase the "current" interest rate is delayed by three months as a manner of showing the penalty for early redemption.
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Re: I-bond rate for May 1st
05-02-2007, 02:46 PM
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#16
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Recycles dryer sheets
Join Date: Nov 2005
Posts: 195
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Re: I-bond rate for May 1st
I haven't redeemed any bonds. They were purchased in Aug. 2001.
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Re: I-bond rate for May 1st
05-02-2007, 02:55 PM
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#17
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Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,860
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Re: I-bond rate for May 1st
Quote:
Originally Posted by clifp
I have modest number of Ibonds with a 3.4% or 3.6% real rate. I think I am going to be keeping those for a long time.
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I remember Mel Lindauer over at the Vanguard Diehards board was going to mortgage his house and max his credit card to buy those when the rates were announced...
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Re: I-bond rate for May 1st
05-02-2007, 04:23 PM
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#18
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Join Date: Nov 2003
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Re: I-bond rate for May 1st
Sundance Kid - if your 3% real bonds were purchased over a year ago, see my post above. Application of new rates is staggered based on your bonds' ISSUE date. A April bond, for instance, won't start showing the new rate until November.
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Re: I-bond rate for May 1st
05-02-2007, 09:57 PM
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#19
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Recycles dryer sheets
Join Date: Nov 2005
Posts: 195
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Re: I-bond rate for May 1st
I still haven't received an answer, that I can understand. It's my fault, probably, for not making myself clear. I certainly don't want to appear negative, toward those that have responded to my initial question and I certainly am appreciative of all responses!
I purchased I Bonds, in August 2001. At a base rate of 3.0%. I've held the bonds, for over 5 years and have no immediate interest in selling. I understand these bonds are guaranteed for 30 years, at 3.0%, plus the inflation rate.
Now, IF I own bonds at 3.0%, plus inflation rate, and the current rate is 2.42%, that means my bonds are paying interest at 5.42%.----- Why then, does the savings bond calculator, tell me that my interest rate is 6.15%? That's, what I don't understand!
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Re: I-bond rate for May 1st
05-03-2007, 05:30 AM
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#20
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Recycles dryer sheets
Join Date: Sep 2005
Posts: 101
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Re: I-bond rate for May 1st
Because you get a full 6 months at the old inflation rate, the only old I-bonds that immediately went to the new rate in May were bought in May and November.
Bonds that were bought in August will go to the new rate in July and pay the new rate for 6 months even though the rate will change again in November.
Jim
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