Comments on: All about Savings Bond rate periods http://www.savings-bond-advisor.com/all-about-savings-bond-rate-periods/ Tue, 16 Mar 2010 06:36:41 +0000 http://wordpress.org/?v=2.0.4 by: Tom Adams http://www.savings-bond-advisor.com/all-about-savings-bond-rate-periods/#comment-54721 Tue, 05 Jan 2010 14:27:35 +0000 http://www.savings-bond-advisor.com/all-about-savings-bond-rate-periods/#comment-54721 Josh - it's your least favorite. Interest rates are always best expressed as annual rates. This particular rate only applies for six months; <a href="http://www.savings-bond-advisor.com/series-i-interest-rate-rules/" rel="nofollow">there's more detail on how I bonds work here</a>. Tom Adams Josh - it's your least favorite. Interest rates are always best expressed as annual rates. This particular rate only applies for six months; there's more detail on how I bonds work here.

Tom Adams

]]> by: Josh K http://www.savings-bond-advisor.com/all-about-savings-bond-rate-periods/#comment-54687 Tue, 05 Jan 2010 06:53:18 +0000 http://www.savings-bond-advisor.com/all-about-savings-bond-rate-periods/#comment-54687 I'm a little confused about savings bond interest rates. My wife just bought our daughter a $50 I-bond, which I understand is earning 3.36% interest during its first 6-month rate period. I also understand that the interest compounds every 6 months. But does that mean that it earns 3.36% on $50 every month, with all that interest adding together? That seems too good to be true. Or does it earn 3.36% for the 6-month period combined -- 0.51% each month? That's not nearly as good, but it projects out to a very respectable annual yield. Or does it earn 3.36% annualized, but paid monthly (0.28% each month, 1.68% for the 6-month rate period)? This one, obviously, is my least favorite! Thanks, Josh I'm a little confused about savings bond interest rates. My wife just bought our daughter a $50 I-bond, which I understand is earning 3.36% interest during its first 6-month rate period.

I also understand that the interest compounds every 6 months.

But does that mean that it earns 3.36% on $50 every month, with all that interest adding together? That seems too good to be true.

Or does it earn 3.36% for the 6-month period combined — 0.51% each month? That's not nearly as good, but it projects out to a very respectable annual yield.

Or does it earn 3.36% annualized, but paid monthly (0.28% each month, 1.68% for the 6-month rate period)? This one, obviously, is my least favorite!

Thanks,
Josh

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