Comments on: New I bond fixed rate 0.10%; EE 0.70% http://www.savings-bond-advisor.com/new-i-bond-fixed-rate-010-ee-070/ Sat, 21 Nov 2009 00:14:47 +0000 http://wordpress.org/?v=2.0.4 by: Tom Adams http://www.savings-bond-advisor.com/new-i-bond-fixed-rate-010-ee-070/#comment-49914 Fri, 23 Oct 2009 15:50:00 +0000 http://www.savings-bond-advisor.com/new-i-bond-fixed-rate-010-ee-070/#comment-49914 Ted - your I bond rate is fixed and unchanging. The rate you earn, however, is the fixed rate plus the inflation rate. If the inflation rate is more negative than your fixed rate is positive, the two add up to zero or less. They can't give your I bonds a negative rate, so this stops at zero. Walt - Yesterday the 10-year TIPS rate was 1.49%. I suspect the next I bond fixed rate will be in the 0% to 0.25% range. Tom Adams Ted - your I bond rate is fixed and unchanging. The rate you earn, however, is the fixed rate plus the inflation rate. If the inflation rate is more negative than your fixed rate is positive, the two add up to zero or less. They can't give your I bonds a negative rate, so this stops at zero.

Walt - Yesterday the 10-year TIPS rate was 1.49%. I suspect the next I bond fixed rate will be in the 0% to 0.25% range.

Tom Adams

]]> by: Walt http://www.savings-bond-advisor.com/new-i-bond-fixed-rate-010-ee-070/#comment-49908 Fri, 23 Oct 2009 13:09:06 +0000 http://www.savings-bond-advisor.com/new-i-bond-fixed-rate-010-ee-070/#comment-49908 Tom, It's now 10/23 what do you thinks the interest rate will be on 11/1? Looking to use the bond for my retirement in about 10 yrs. Great web site. Thanks. Tom, It's now 10/23 what do you thinks the interest rate will be on 11/1? Looking to use the bond for my retirement in about 10 yrs. Great web site. Thanks.

]]> by: Ted http://www.savings-bond-advisor.com/new-i-bond-fixed-rate-010-ee-070/#comment-49898 Thu, 22 Oct 2009 16:50:54 +0000 http://www.savings-bond-advisor.com/new-i-bond-fixed-rate-010-ee-070/#comment-49898 Wow! Hi Tom, great website. Wish I would have found this earlier. Have been buying I-bonds since they were first offered. Unfortunately, those early issues were redeemed shortly after purchase "since I needed the money". Sometimes I plug in some of the early years original purchase dates and denominations to see what they would be worth today. Ouch! Oh Well. All is not lost, though -- I have a newer "slug" of bonds that I purchased from Feb 2005 through May 2008. The bonds are yielding between 3.45 and 4.78 per cent, but my Savings Bond Wizard is showing a rate of Zero (0) for all issues. A google search of this led me to this site, and trying to catch up on all the posts. I thought I understood I-bond features well enough, now I am not so sure. It was my understanding that the fixed rate portion of the bond was good for the life of the bond, but now it appears this is not so?? Wow! Hi Tom, great website. Wish I would have found this earlier. Have been buying I-bonds since they were first offered. Unfortunately, those early issues were redeemed shortly after purchase "since I needed the money". Sometimes I plug in some of the early years original purchase dates and denominations to see what they would be worth today. Ouch! Oh Well. All is not lost, though — I have a newer "slug" of bonds that I purchased from Feb 2005 through May 2008. The bonds are yielding between 3.45 and 4.78 per cent, but my Savings Bond Wizard is showing a rate of Zero (0) for all issues. A google search of this led me to this site, and trying to catch up on all the posts.

I thought I understood I-bond features well enough, now I am not so sure. It was my understanding that the fixed rate portion of the bond was good for the life of the bond, but now it appears this is not so??

]]> by: Tom Adams http://www.savings-bond-advisor.com/new-i-bond-fixed-rate-010-ee-070/#comment-49544 Wed, 14 Oct 2009 15:21:22 +0000 http://www.savings-bond-advisor.com/new-i-bond-fixed-rate-010-ee-070/#comment-49544 Susan - the difference is that when you buy at an auction you get the same price everybody else gets, including the bond dealers. When you buy on the open market (from a bond dealer) you will pay more in fees and hidden commissions. In the TIPS vs. I bonds question - I bonds are better when prices are going down because the interest rate can't drop below 0. TIPS actually decline in value in this situation. If prices are going up TIPS earn more than I bonds. On the other hand, I bonds are tax-deferred and TIPS aren't. It's not easy to figure out which one is better for your situation. Maybe some of each? Tom Adams Susan - the difference is that when you buy at an auction you get the same price everybody else gets, including the bond dealers. When you buy on the open market (from a bond dealer) you will pay more in fees and hidden commissions.

In the TIPS vs. I bonds question - I bonds are better when prices are going down because the interest rate can't drop below 0. TIPS actually decline in value in this situation. If prices are going up TIPS earn more than I bonds. On the other hand, I bonds are tax-deferred and TIPS aren't. It's not easy to figure out which one is better for your situation. Maybe some of each?

Tom Adams

]]> by: Susan http://www.savings-bond-advisor.com/new-i-bond-fixed-rate-010-ee-070/#comment-49500 Wed, 14 Oct 2009 00:36:21 +0000 http://www.savings-bond-advisor.com/new-i-bond-fixed-rate-010-ee-070/#comment-49500 Hi Tom: I am trying to decide about investing some money in I-bonds or TIPS. I can purchase TIPS now on the open market or wait until April. Is there any historical or other type of info that shows if it is more advantegeous (less expensive) to wait until an auction vs. buying TIPS on the open market? Also while I read all the relevant info about I-Bonds and TIPS I cannot figure out how to decide which one makes more sense to buy now (or in the next few month). Any advice? Thanks. Hi Tom:

I am trying to decide about investing some money in I-bonds or TIPS. I can purchase TIPS now on the open market or wait until April.

Is there any historical or other type of info that shows if it is more advantegeous (less expensive) to wait until an auction vs. buying TIPS on the open market?

Also while I read all the relevant info about I-Bonds and TIPS I cannot figure out how to decide which one makes more sense to buy now (or in the next few month).

Any advice? Thanks.

]]> by: Tom Adams http://www.savings-bond-advisor.com/new-i-bond-fixed-rate-010-ee-070/#comment-47339 Mon, 07 Sep 2009 20:18:08 +0000 http://www.savings-bond-advisor.com/new-i-bond-fixed-rate-010-ee-070/#comment-47339 Hi Mike - I appreciate your comments. I knew we were in trouble back in the 80s when my bank tried to get me to pay for insurance in case my credit card was stolen without mentioning that by law my maximum possible loss was $50. If you can't trust your bank to treat you fairly, <i>why would you trust it with your money</i>? How could the President of that bank not get it? People say capitalism is based on greed, but the fact is it's based on trust. When you can't trust the companies you deal with to treat you fairly, it adds friction to your transactions, because you have to spend time reading the fine print and asking others about their experiences. This friction slows down the economy and eventually destroys capitalism. Which is pretty much where we are now. We've been lied to so much by people who are only pretend capitalists we've stopped buying stuff. I think your economic analysis is right on. Tom Adams Hi Mike - I appreciate your comments.

I knew we were in trouble back in the 80s when my bank tried to get me to pay for insurance in case my credit card was stolen without mentioning that by law my maximum possible loss was $50. If you can't trust your bank to treat you fairly, why would you trust it with your money? How could the President of that bank not get it?

People say capitalism is based on greed, but the fact is it's based on trust. When you can't trust the companies you deal with to treat you fairly, it adds friction to your transactions, because you have to spend time reading the fine print and asking others about their experiences. This friction slows down the economy and eventually destroys capitalism.

Which is pretty much where we are now. We've been lied to so much by people who are only pretend capitalists we've stopped buying stuff. I think your economic analysis is right on.

Tom Adams

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