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New Series I Bonds Rates

Rocky
edited October 2012 in Fund Discussions
Anyone have a guess what the new Series I Bond rates will be tomorrow?

Here is what they were the past 6 months:

From Current iBond Rates
05/01/12 Update: The Current I Bond Composite Earnings Rate is 2.20% with a Fixed Rate of 0.00% The earnings rate for Series I Savings Bonds is a combination of a fixed rate, which applies for the life of the bond, and the semiannual inflation rate. The 2.20% earnings rate for I bonds bought from May 20121 through October 31, 2012 will apply for the succeeding six months after the issue date.
BTW, Today is the last day to lock in 6 months at 2.20%.

From I Bonds Explained
Series 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.

Earnings rates for I bonds are set each May 1 and November 1. Interest accrues monthly and compounds semiannually. Bonds held less than five years are subject to a three-month interest penalty. I Bonds have an interest-bearing life of 30 years. When the inflation rate is less than zero, a bond's earnings rate is less than its fixed rate (but the earnings rate is never less than zero)
I've already bought my full quote ($10,000) for 2012 or I'd buy more.

Comments

  • catch22catch22
    Howdy Rocky,

    Can't answer the I bond question.

    Are your I bond holdings in a tax sheltered acct.; and if not, I presume you have to pay tax on an annual basis against the implied earnings, yes?

    Lastly, do you hold any TIPs mutual funds?

    Regards,
    Catch
  • InvestorInvestor
    edited October 2012
    Reply to @catch22: I bonds are unique in their own. Taxes on Interest is deferred up to 30 years (until maturity) or redemption of your bonds.

    So, they do not have to go to tax sheltered account. In fact, I am not sure if you can buy them in tax sheltered account.

    http://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_itaxconsider.htm
  • Rocky
    I Bonds now pay 1.18% for the six months after purchase.

    The rate table on this I Bonds Page shows (scroll down) you can get 1.10% on up to $50K at Everbank without having to lock up your money. That might be a good alternative for the next six months as money in I Bonds are locked for a year then there is a rate penalty of 3 months interest if you redeem before 5 years. Then again, the inflation protection with the iBonds is good if the Fed continues with QE, keeping savings account rates low.
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