Comments on: Hold off on Series I bond rollovers http://www.savings-bond-advisor.com/hold-off-on-series-i-bond-rollovers/ Wed, 08 Feb 2012 16:57:35 +0000 http://wordpress.org/?v=2.0.4 by: Tom Adams http://www.savings-bond-advisor.com/hold-off-on-series-i-bond-rollovers/#comment-1207 Fri, 03 Nov 2006 14:50:47 +0000 http://www.savings-bond-advisor.com/hold-off-on-series-i-bond-rollovers/#comment-1207 Tim - As of now, November 2006, here's where your bonds are: 09/05 - 1.2% base - 3rd month of 1.00% inflation 10/05 - 1.2% base - 2nd month of 1.00% inflation 11/05 - 1.0% base - 1st month of 3.10% inflation 12/05 - 1.0% base - 6th month of 1.00% inflation 01/06 - 1.0% base - 5th month of 1.00% inflation These agree with what you've calculated except for the 12/05 bond. For that one, you've picked up an error somewhere. That bond is paying the 2.01% rate this month. The composite rate is always a tiny bit more than just adding together the base and inflation rates because the Treasury's actual calculation also adjusts the base rate for inflation. Tim - As of now, November 2006, here's where your bonds are:

09/05 - 1.2% base - 3rd month of 1.00% inflation
10/05 - 1.2% base - 2nd month of 1.00% inflation
11/05 - 1.0% base - 1st month of 3.10% inflation
12/05 - 1.0% base - 6th month of 1.00% inflation
01/06 - 1.0% base - 5th month of 1.00% inflation

These agree with what you've calculated except for the 12/05 bond. For that one, you've picked up an error somewhere. That bond is paying the 2.01% rate this month.

The composite rate is always a tiny bit more than just adding together the base and inflation rates because the Treasury's actual calculation also adjusts the base rate for inflation.

]]> by: Tim http://www.savings-bond-advisor.com/hold-off-on-series-i-bond-rollovers/#comment-1206 Fri, 03 Nov 2006 13:49:09 +0000 http://www.savings-bond-advisor.com/hold-off-on-series-i-bond-rollovers/#comment-1206 Tom, using a bond calculators - I find that I have consistent interest rates except for the months of May and November. For instance, my bonds for 9/05, 10/05 show interest rate of 2.21 - the bond for 11/05 is 4.12 - then the one for 12/05 is 3.2 - the one for 01/06 is back down to 2.01. I guess my question is - why aren't the interest rates the same over a six month spread of bonds? Tom, using a bond calculators - I find that I have consistent interest rates except for the months of May and November. For instance, my bonds for 9/05, 10/05 show interest rate of 2.21 - the bond for 11/05 is 4.12 - then the one for 12/05 is 3.2 - the one for 01/06 is back down to 2.01. I guess my question is - why aren't the interest rates the same over a six month spread of bonds?

]]> by: Tom Adams http://www.savings-bond-advisor.com/hold-off-on-series-i-bond-rollovers/#comment-808 Tue, 05 Sep 2006 16:12:18 +0000 http://www.savings-bond-advisor.com/hold-off-on-series-i-bond-rollovers/#comment-808 Faye - Right now we only have four of the six months of CPI data needed to determine the next rate. You can follow this and see where we are right now in my monthly <a href="http://www.savings-bond-advisor.com/cpi-inflation-update/" rel="nofollow">inflation update</a>. Faye - Right now we only have four of the six months of CPI data needed to determine the next rate. You can follow this and see where we are right now in my monthly inflation update.

]]> by: Faye http://www.savings-bond-advisor.com/hold-off-on-series-i-bond-rollovers/#comment-807 Tue, 05 Sep 2006 16:01:50 +0000 http://www.savings-bond-advisor.com/hold-off-on-series-i-bond-rollovers/#comment-807 Tom, it is decision time on redeeming my I-Bonds. What does the next 6-month rate period look like to you? Thanks. Faye Tom, it is decision time on redeeming my I-Bonds. What does the next 6-month rate period look like to you? Thanks. Faye

]]> by: Faye http://www.savings-bond-advisor.com/hold-off-on-series-i-bond-rollovers/#comment-497 Sun, 02 Jul 2006 04:38:34 +0000 http://www.savings-bond-advisor.com/hold-off-on-series-i-bond-rollovers/#comment-497 Thanks Tom. Of course, don't know why I got confused about that date. After reading your response, I may redeem the June 2005 bonds in September and hold the June 2004 bonds for the next 6-month rate. If rate is attractive, I'll buy new bonds to get the higher base rate. Faye Thanks Tom. Of course, don't know why I got confused about that date. After reading your response, I may redeem the June 2005 bonds in September and hold the June 2004 bonds for the next 6-month rate. If rate is attractive, I'll buy new bonds to get the higher base rate. Faye

]]> by: Tom Adams http://www.savings-bond-advisor.com/hold-off-on-series-i-bond-rollovers/#comment-496 Sun, 02 Jul 2006 02:34:53 +0000 http://www.savings-bond-advisor.com/hold-off-on-series-i-bond-rollovers/#comment-496 Faye - since your bonds are less than five years old, you'll lose the most recent three months of interest if you redeem them. If you redeem in September, you'll lose the interest for June-July-Aug, when your bonds were paying a relatively low interest rate (2.01% for the June 04 I bonds, and 2.21% for the June 05 I bonds.) You can redeem in October instead, if you like, but the hidden assumption here is that the reason you're redeeming the bonds at all is because you want a higher interest rate. If that's the case, you should redeem in September. Your other option is to hold on and see what your I bonds will pay in their next 6-month rate period. At the moment it looks like it will be another eyepopper. Faye - since your bonds are less than five years old, you'll lose the most recent three months of interest if you redeem them.

If you redeem in September, you'll lose the interest for June-July-Aug, when your bonds were paying a relatively low interest rate (2.01% for the June 04 I bonds, and 2.21% for the June 05 I bonds.)

You can redeem in October instead, if you like, but the hidden assumption here is that the reason you're redeeming the bonds at all is because you want a higher interest rate. If that's the case, you should redeem in September.

Your other option is to hold on and see what your I bonds will pay in their next 6-month rate period. At the moment it looks like it will be another eyepopper.

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