Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I have a couple of I Bonds that is not earning any interest. Should I cash this out? I recently just checked on them ,,I'm holding on to them for emergency or for maybe for my child's college,,,any advice?
I would hold on to them if I were you. Next month (November) the rates on I-Bonds will change again and will likely be positive--perhaps over 6%, based on CPI-U numbers for the last few months. And if you do end up using them for your child's education, all interest earned can be tax-free.
Just curious, what is the base rate on your I-Bonds?
Where can I find the base rate? The I bonds were issued 12/07, 09/06, 05/06 and 12/05. I also have a couple of EE bonds,,should I hold to them or exchange them for I bonds? Thanks!
Rates are announced every 6 months in November and May of every year.
So your bonds are earning (in the order you listed): 1.2%, 1.4%, 1.4%, and 1%. Those are pretty good base rates, and will only get better as inflation increases.
The EE bonds are nearly the same thing as the I bonds, but it also depends on when they were bought. According to the website: Bonds issued after May 2005 earn a fixed rate of return. Variable rates for bonds bought from May 1997 through April 2005 are based on 90% of the 6-month averages of 5-year Treasury Securities yields.
So if you bought your EE bond after May 05 then it will be a fixed rate of return. If you want to bet that inflation will outpace the rate of return on your bond then by all means convert over to an I bond. You will take a 3 month interest hit as you cash out though, so factor taht into your calculations. If you bought your bond before then, you will have to do some homework. You will have to look up the 5-year Treasuries note yields from 6 months prior to today and average it out, then multiply by 0.9. That will give you a % yield and then can compare.
I actually quickly looked at Yahoo finance's page for the previous 6 months and the average for the past 6 months is ~2.3%. So multiply by .9 and you get ~2%.
What I would do is wait to convert in that case, and see what the fixed yield on the I bonds will be and what the CPI-U index looks like too. And remember just because it spikes doesn't mean that it will stay that way (some will argue with me because of what the government is doing to destroy the dollar), so if you convert to an I bond you're basically betting that the bond traders aren't asking for high enough yields to offset inflation. That's a risky bet I think since all the brains in trading are in bonds. On the other hand, people may be putting more money into stock and equities and thus have an appetite for risk, so they will keep money out of bonds and thus depress the rates.
It's a toss up, and I would wait to see what the Fed says inflation looks like. If it's anemic again, you're in a good position because you still have better-than-zero rates on the EE bond. If it's strong ... still hold, but pay attention to what the 5-year notes are doing (assuming you have the older one). If you have the newer EE, and its earning a poor fixed %, and there's strong inflation, by all means convert it.
Whew!! That's a great response!!! Seems like you'r really knowledgable abt. this. My EE bonds are earning 1.64% interest. I guess I would hold on to them,,,like I mentioned, it's for my child's education anyway and that will be 5 yrs. away (hopefully and hopefully she gets a scholarship or something! Ha-ha-ha!). I'm still buying some more I bonds through payroll so I can have some sort of an automatic investment and one that I will have a hard time exchanging (since I hate going to banks anyway). Thanks a lot!!!
I am in a similar situation. I have several I bonds purchased from 2001-2003. I use the bond wizard and check them often. I have noticed the past couple of months a substantial drop in interest. When I looked at my listing I noticed that the interest rate has been 0% since October. In Sept. it was over 6%. So, for the past 3 months I've received no interest. Could someone please advise what I should do. It just seems that a drop of 6% is an awful lot. Thanks
So, for the past 3 months I've received no interest. Could someone please advise what I should do. It just seems that a drop of 6% is an awful lot.
I believe you're mistaken. If you bought your I-bonds between 2001 and 2003, they should currently be earning somewhere between 4-6%. Also, the rates couldn't have gone from 6% in September to 0% in October since the rates only change in November and May.
I like I-Bonds. In a deflationary environment, like now, they may not earn interest, but they do not decrease in value, where TIPS (Treasury Inflation-Protected Securities) bonds can actually lose value if the CPI-U goes negative.
When the obvious inflationary effects of all of Comrade Bernanke's printing press runs kick in, they'll be the best game in town. At least right up until the treasury defaults on its debt, which becomes more of a possibility by the day. We're at $12.4 trillion in debt now, and Congress wants to jack that to $14.3 trillion. 15% in a year? That's the Road to Perdition we're on.
On second thought, cash in the I-bonds and spend it on booze and hookers. At least then when TSHTF you'll be able to think back and smile.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I bonds-no interest
