Comments on: Savings Bond Alert #023 http://www.savings-bond-advisor.com/savings-bond-alert-023/ Mon, 13 Oct 2008 14:35:35 +0000 http://wordpress.org/?v=2.0.4 by: Tom Adams http://www.savings-bond-advisor.com/savings-bond-alert-023/#comment-742 Wed, 16 Aug 2006 20:30:31 +0000 http://www.savings-bond-advisor.com/savings-bond-alert-023/#comment-742 Paul - in the most general sense, the I bond fixed base-rate should be related to the amount of risk you're taking - the more risk, the higher the rate. One way to interpret the <a href="http://www.savings-bond-advisor.com/series-i-savings-bond-fixed-base-rates/" rel="nofollow">high base rates right after TIPS and I bonds were introduced</a> is that the early investors were taking some early-investor risk and the Treasury had to pay higher rates than it does now. There's a link in the main article above to an article about an S&P report that says the base rate on inflation-protected securities correlates well with the credit rating of the issuing government. At any rate, TIPS and I bonds are less than 10 years old. I don't think we have enough history yet to know what the "typical" fixed rate will be, although right now those early I bonds with the 3%+ base rates look really good. Paul - in the most general sense, the I bond fixed base-rate should be related to the amount of risk you're taking - the more risk, the higher the rate.

One way to interpret the high base rates right after TIPS and I bonds were introduced is that the early investors were taking some early-investor risk and the Treasury had to pay higher rates than it does now.

There's a link in the main article above to an article about an S&P report that says the base rate on inflation-protected securities correlates well with the credit rating of the issuing government.

At any rate, TIPS and I bonds are less than 10 years old. I don't think we have enough history yet to know what the "typical" fixed rate will be, although right now those early I bonds with the 3%+ base rates look really good.

]]> by: Paul http://www.savings-bond-advisor.com/savings-bond-alert-023/#comment-738 Wed, 16 Aug 2006 19:38:24 +0000 http://www.savings-bond-advisor.com/savings-bond-alert-023/#comment-738 Based on last November, the Treasury seems to adjust the fixed rate based on the inflation rate. So it's starting to look more likely that we won't see much rise (if any) in the I bond fixed rate. Perhaps it'll be a repeat of last November, and the fixed rate will drop. Are the days of 3%+ I bond fixed rates a thing of the past? Based on last November, the Treasury seems to adjust the fixed rate based on the inflation rate. So it's starting to look more likely that we won't see much rise (if any) in the I bond fixed rate. Perhaps it'll be a repeat of last November, and the fixed rate will drop.

Are the days of 3%+ I bond fixed rates a thing of the past?

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