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Bonds bought during the last period with the higher, 0.20% base rate will pay 2.04% for the next six months. To see what older Series I bonds will pay, see:The current I Bond Composite Earnings Rate is 1.94% with a fixed rate of 0.10%Fixed rate = 0.10%
6 month Inflation rate = 0.92%
Composite rate =[fixed rate + (2 x inflation rate) + (fixed rate x inflation rate)]
[0.0010 + (2 x 0.0092) + ( 0.0010 x 0.0092)]= 0.0194 = 1.94%
I own some with a 3.0% base rate that will pay 4.87% when they adjust up from their current earnings rate of 4.20%.
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Comments
Hey, here's a Peter Lynchism:
"If you must own government bonds, buy them outright from the Treasury and avoid bond funds, in which you're paying management fees for nothing."
Ha!
Here is link to TreasuryDirect.com.
Regards,
Ted
CPI is running at 1.7% per the last release
http://www.bls.gov/news.release/cpi.nr0.htm
CONSUMER PRICE INDEX – AUGUST 2014
The Consumer Price Index for All Urban Consumers (CPI-U) decreased
0.2 percent in August on a seasonally adjusted basis, the U.S. Bureau
of Labor Statistics reported today. Over the last 12 months, the all
items index increased 1.7 percent before seasonal adjustment.