No Change in I Bond Fixed Rate
The Treasury Department announced this morning that the I Bond fixed rate for the next 6 months is 1.4%, no change from the previous cycle. While they didn’t lower it to 1.2% as I speculated in my previous post, this fixed rate is still not attractive. I Bonds remain uncompetitive for both short term and long term needs. For short term, T-Bills and short-term CDs yield more. For long term, TIPS has much better real yields. I will sell my I Bonds bought in October 2005 in January 2007.
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Comments
3 Comments on No Change in I Bond Fixed Rate
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indexfundfan on November 1, 2006
Hi TFB,
It’s interesting we share the same ideas! This morning, I submitted the sale of the I Bonds bought on Oct and Nov 2005. For now, I am holding on to the I BOnds that were bought in 2003 and earlier.
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TFB on November 1, 2006
Hi IndexFundFan,
If it’s not too late, you may want to hang on to your Oct 2005 I Bonds for a little longer because if you sell it now, you will lose 2 months of interest @ 6.93% and 1 month @ 2.21% while you gain two months @ ~5%. Of course if the amount is small, the difference is very small too.
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indexfundfan on November 1, 2006
Oh, I didn’t think of that. But it’s too late now…
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