We moved to I Bond Rates
I Bonds are a low-risk, liquid savings product. While you own them they
earn interest and protect you from inflation. You may purchase I Bonds
at www.TreasuryDirect.gov and at most local financial institutions.
11/8/08 Update:
Newly issued series I bonds will pay 5.64% and Series EE Bonds will pay
1.30%. iBonds (Inflation Protected Bonds) are a 100% safe way to defer
taxes while getting inflation adjusted return for up to 30 years. These
rates for new bonds are effective from November 2008 through April
30, 2009.
Earnings rates for I bonds and fixed rates for EE bonds are set each
November 1 and May 1. Interest accrues monthly and compounds
semiannually. Bonds held less than five years are subject to a
three-month interest penalty. Both series have an interest-bearing life
of 30 years; the EE bond fixed rate applies to a bond's 20-year
original maturity.
I Bond Earnings Rate 5.64% with a Fixed Rate of 0.70%
The earnings
rate for I-Bonds is a combination of a fixed rate, which applies for
the life of the bond, and the semiannual inflation rate. The 5.64%
earnings rate for I bonds bought from November 2008 through April 30,
2009 will apply for their first six months after issue. The earnings
rate combines a 0.70% fixed rate of return with the an adjustment for
the annualized rate of inflation as measured by the Consumer Price
Index for all Urban Consumers (CPI-U). The fixed rate applies for the
30-year life of I bonds purchased during this six-month period.
Best Time to Buy I Bonds: Near the end of the month. Make sure you leave enough time for funds to clear.
Best Time to Sell I Bonds:
At the start of the month since interest for the prior month is
computed on the first of each month. You don't earn interest for
fractional months so sell only after the new interest shows up in your
account, usually the first of the month,
I Bond Composite rate = [Fixed rate + (2 x Inflation rate) + (Fixed rate
x Inflation rate)]
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