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I bonds rates
Old 05-03-2017, 06:32 AM   #1
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I bonds rates

From Treasury Direct:

The composite rate for I bonds issued from May 1, 2017, through October 31, 2017, is 1.96%. This rate applies for the first six months you own the bond.
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Old 05-03-2017, 06:34 AM   #2
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The fixed rate is zero. No new investment for me.
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Old 05-03-2017, 06:36 AM   #3
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Fixed rate is zero. I'll pass.
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Old 05-03-2017, 06:55 AM   #4
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We already maxed out this year. Still a better rate than most safe investments and offers future inflation protection and tax deferral on income.
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Old 05-03-2017, 07:14 AM   #5
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We already maxed out this year. Still a better rate than most safe investments and offers future inflation protection and tax deferral on income.
+1

Already maxed out for the year plus we asked our tax refund to be paid as paper I-bonds as well.
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Old 05-03-2017, 07:53 AM   #6
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We already maxed out this year. Still a better rate than most safe investments and offers future inflation protection and tax deferral on income.
While the interest cancels out inflation, you still lose after paying taxes. It is true that the alternatives are terrible also. I just checked to see that 5-year CDs are paying 2.3%, while 1-year CDs pay 1.4%. The inflation rate for the last 12 months (3/2016-3/2017) runs about 2.4% annual rate.

I still have about 8% of my stash in I bonds, bought more than 10 years ago when I got 1.1% above inflation. I used to have more, percentage wise, but the stock portion outgrew the I bonds. I have not bought any more since.
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Old 05-03-2017, 09:55 AM   #7
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Originally Posted by NW-Bound View Post
While the interest cancels out inflation, you still lose after paying taxes. It is true that the alternatives are terrible also. I just checked to see that 5-year CDs are paying 2.3%, while 1-year CDs pay 1.4%. The inflation rate for the last 12 months (3/2016-3/2017) runs about 2.4% annual rate.

I still have about 8% of my stash in I bonds, bought more than 10 years ago when I got 1.1% above inflation. I used to have more, percentage wise, but the stock portion outgrew the I bonds. I have not bought any more since.


I just bought a 2.3% CD from Synchrony Bank last week. CDs are taxable while I Bonds are tax deferred. But they both a good place to put your "safe" money. Neither are intended to beat inflation and I don't think there's a bond or CD out there that could. I have some I Bonds from the old days, but in small denominations that don't matter much. My goal with safe money is to not lose any more value over time than necessary. I view Gold/Silver as protection against hyperinflation. My stocks and real estate investments are designed for income and growth, carefully selected to not hurt too bad in a market collapse by choosing companies that provide things people need no matter what.
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Old 05-03-2017, 06:01 PM   #8
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Appreciate the reminder... Checked, and my 2003 bonds are paying 6.21%.
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Old 05-04-2017, 02:40 AM   #9
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I bought all of my 30K worth of I-bonds in the same year back when real rates were so high (3 to 3.4%)

I will actually have to cash them in over a period of 3 tax years to lower my tax bill so as to stay in the 15% bracket. So some will be cashed in at the 28.5 year mark, some at the 29.5 year mark, etc.

And during those 3 tax years, I will not be able to IRA-to-Roth convert.

This strategy seems to make sense, even if real rates are still effectively 0 at that time (for other fixed income investments) and I am losing out on a year and a half or a half year of growth at 3% real rates. The value of only paying 15% tax instead of 25% tax seems higher.
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Old 05-05-2017, 07:28 AM   #10
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Got my stash back when they actually paid interest (in the 3% range IIRC). They will likely outlive me unless I have a need for the money. I am glad I have them even though they are a relatively small portion of my stash. They used to be a really good deal. Now, they aren't worth the effort IMO. YMMV
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