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erinm said:   I was planning to buy 10k worth this month, but I think I'm going to wait for May to see what the new rate is and maybe get a higher fixed rate?
  im holding off sending in my taxes till May, and hopefully get a new higher fixed rate

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MoneyOCD said:   About  predictions- looks like inflation jumped in February and I would expect similar increase in March, if I am right  we will cross 1% for inflation component. Another question is what will be the fixed rate for I-Bonds issued starting May 1. 
 

  My guess is that if i>.75%, F=0.  The Treasury has no interest in maintaining a fixed rate component, especially with all the money they're losing with the early I-bonds.  Granted, .2% is not going to break the Treasury, but why put it in there if they don't have to?

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ntr91 said:   
MoneyOCD said:   About  predictions- looks like inflation jumped in February and I would expect similar increase in March, if I am right  we will cross 1% for inflation component. Another question is what will be the fixed rate for I-Bonds issued starting May 1. 
  My guess is that if i>.75%, F=0.  The Treasury has no interest in maintaining a fixed rate component, especially with all the money they're losing with the early I-bonds.  Granted, .2% is not going to break the Treasury, but why put it in there if they don't have to?

  What money are they losing with the early i-bonds?  Please elaborate.

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mysteryAgain said:   What money are they losing with the early i-bonds?  Please elaborate.

The fixed portion of the composite rate for the first couple of years was 3%+. As long as inflation isn't negative, 3% over the CPI-U rate is a pretty large premium for an investment that can't lose money.

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I went ahead and bought today b/c of the fixed rate component. If the fixed rate goes up in May, I'll just be upset with myself and move on. Not going to "sweat the small stuff".

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mysteryAgain said:   
ntr91 said:   
MoneyOCD said:   About  predictions- looks like inflation jumped in February and I would expect similar increase in March, if I am right  we will cross 1% for inflation component. Another question is what will be the fixed rate for I-Bonds issued starting May 1. 
  My guess is that if i>.75%, F=0.  The Treasury has no interest in maintaining a fixed rate component, especially with all the money they're losing with the early I-bonds.  Granted, .2% is not going to break the Treasury, but why put it in there if they don't have to?

  What money are they losing with the early i-bonds?  Please elaborate.

  See the equivalent YTMs on marketable treasuries...

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Is there a way to calculate future rates? Will there be a period where the new rate is announced and we still have time to get in on the old fixed rate (assuming the fixed portion goes down), or hold off and buy at the new rate (assuming the fixed portion goes up)?

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blotsome said:   Is there a way to calculate future rates? Will there be a period where the new rate is announced and we still have time to get in on the old fixed rate (assuming the fixed portion goes down), or hold off and buy at the new rate (assuming the fixed portion goes up)?
  You will know the inflation rate on the 15th of April. They don't announce the other fixed rate until they start selling the new bonds the first of May.
So you know part of it for about 2 weeks.
Check here on the 15th and you will know that part.

rated:
dj said:   
blotsome said:   Is there a way to calculate future rates? Will there be a period where the new rate is announced and we still have time to get in on the old fixed rate (assuming the fixed portion goes down), or hold off and buy at the new rate (assuming the fixed portion goes up)?
  You will know the inflation rate on the 15th of April. They don't announce the other fixed rate until they start selling the new bonds the first of May.
So you know part of it for about 2 weeks.
Check here on the 15th and you will know that part.

Now a barrage of other questions/decisions will arise when that happens.

How much to put in May or wait until November?

rated:
Thanks for the quick reply. I maxed out my contribution 3 years ago when the rates were in the 4% when no one else was offering a return close to that. I've been considering closing the position completely due to the low rates, but the addition of a fixed rate is making me consider cashing in the old bonds and getting new ones (though loosing the physical paper bonds will be hard for nostalgia reasons). Just more things to consider, thanks for the info! This forum is what lead me to make my first i-bonds purchase, so I am in debt to the advise here.

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Is it too late to buy i-bonds for 2013? I know for Roth IRA it is June 30. I wonder if it works the same way.

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mysteryAgain said:   Is it too late to buy i-bonds for 2013? I know for Roth IRA it is June 30. I wonder if it works the same way.
Yes, NO, no.

I guess you don't know what you don't know.

I realize my response is a little snarky, but come on, Roth IRA June 30!!!

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"Deadline for IRA contributions for the 2013 tax year: Tuesday, April 15, 2014" What's the last day for I-bonds?

rated:
March CPI-U is posted = 236.293
Base line for next change (September) = 234.149
Total inflation for Oct+Nov+Dec+Jan+Feb+Mar = +0.92%
It was +0.27% as of last month and went UP in March.

If fixed component of I-bond rate will be 0% we are looking at 1.84% rate starting May 1, 2014.
If fixed component of I-bond rate will be 0.2% we are looking at 2.04% rate starting May 1, 2014.

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mysteryAgain said:   "Deadline for IRA contributions for the 2013 tax year: Tuesday, April 15, 2014" What's the last day for I-bonds?
  December 31.

rated:
MoneyOCD said:   March CPI-U is posted = 236.293
Base line for next change (September) = 234.149
Total inflation for Oct+Nov+Dec+Jan+Feb+Mar = +0.92%
It was +0.27% as of last month and went UP in March.

If fixed component of I-bond rate will be 0% we are looking at 1.84% rate starting May 1, 2014.
If fixed component of I-bond rate will be 0.2% we are looking at 2.04% rate starting May 1, 2014.

That's much better than anything else right now, especially with the current market volatility. Glad to see I've waited. 
 

rated:
mysteryAgain said:   That's much better than anything else right now, especially with the current market volatility. Glad to see I've waited. 
  
You will lose if you wait until May 1st and the fixed rate drops to 0.00. 

The interest rate is high thus the probability of a 0.0 fixed rate is high.

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Good point storm. I'm tempted to grab a few k while the fixed is >0; who knows if it will still be there next month.

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If you buy today, first 6 months will be 1.38%, second six months - 2.04%, that is already known.
If you buy May1, worst case is first six months will 1.84%, second six months is completely unknown.
.

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MoneyOCD said:   If you buy today, first 6 months will be 1.38%, second six months - 2.04%, that is already known.
If you buy May1, worst case is first six months will 1.84%, second six months is completely unknown.
.

  With the way interest rates are moving, I am inclined to believe that  the following six month are unlikely to be less than 1.64.

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