In article <50bde0e6.0309211729.30fadb63[at]posting.google.com> ,
anoop[at]alumni.duke.edu (Anoop Ghanwani) writes:

- quote -

Yes.

The fixed rate component of I-Bonds issued at this time is 1.10%. Whatever the
fixed rate component is for the month in which the I-Bond is issued, the fixed
rate component will remain unchanged for the life of that I-Bond.

The inflation component (the "I" in "I-Bonds" or more formally "Series I
Savings Bonds") is based on the CPI-U (Consumer Price Index for all Urban
consumers) and the inflation component changes every six months. There is a
link to how the interest rate is calculated on the I-Bond Information Page:
http://www.publicdebt.treas.gov/sav/sbiinvst.htm

The new rates are announced on the first of May and November. If your I-Bond
was issued in May or November, the interest rate will change based on the new
CPI-U component in that month. For I-Bonds issued in other months, the I-Bond
will continuing earning the old rate until the 6-month "anniversary" of its
issue month (e.g., for an I-Bond purchased in September, its rate will change
in March and September, so there will be a delay of 4 months between when the
new rate is announced and when it would apply to a September I-Bond).

- quote -

There are several ways:

1. Web-based "Savings Bond Calculator"

2. Windows-based "Savings Bond Wizard"

3. A file of values that I think one can still download.

4. For Treasury Direct customers (I-Bonds and EE-Bonds in "book entry" or
paperless form), one can log on to Treasury Direct and see the current
redemption value.

The first three should be in links from the I-Bond Information Page.

- quote -

Usually it requires downloading an updated rate file from the same place where
one had downloaded the Savings Bond Wizard. Recently, however, it required
downloading a new Wizard and then importing your Bond profile.

Mark A. Young

"HW \"Skip\" Weldon" <skip5700[at]yahoo.com> writes:

- quote -

It changes on 1 May and 1 November of each year. The nominal
rate is MAX(0, annualized change in CPI-U + bond's guaranteed real return)[*]
[*] It's actually a bit more complicated than that. See
http://www.publicdebt.treas.gov/sav/sbirate2.htm
and
ftp://ftp.publicdebt.treas.gov/sbibond.pdf

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us
France: the Enemy - http://www.nytimes.com/2003/09/18/opinion/18FRIE.html

On 22 Sep 2003 14:20:00 GMT, Rich Carreiro
<rlcarr[at]animato.arlington.ma.us> wrote:


- quote -

How often is the nominal rate subject to change, and what is the
benchmark?

-HW "Skip" Weldon
Columbia, SC

anoop[at]alumni.duke.edu (Anoop Ghanwani) writes:

- quote -

If you buy it right now, it will earn (inflation + 1.1%)
for its entire life. So it will have a constant 1.1% real return,
but a fluctuating nominal return. Also, the nominal return
can never go below zero.

In past issues, the real return has been as high as 3.5% or so (ah, to
have purchased some I-bonds back then :-)

- quote -

Ask the Treasury. Their software must have to deal with it, since no
savings bond has a constant nominal return. I, EE, etc. bonds all
have changeable rates, though the algorithm which specifies the
changes is different for each type of savings bond.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us
France, enemy: http://www.nytimes.com/2003/09/18/opinion/18FRIE.html

Rich Carreiro <rlcarr[at]animato.arlington.ma.us> wrote in message news:<u3cfgc4gu.fsf[at]animato.arlington.ma.us> ...
- quote -

I would like to understand how the rates work.

If I buy an I-bond today at 4.66%, will the interest rate on
this particular bond vary over its life? If so, how do I track
its value at any given time? I use the Savings Bonds Wizard
to keep track of their value now, but if the rates do change,
how would the Wizard know? Would it just require a new version
of the software?

Thanks,
-Anoop

kathyae[at]webtv.net (kat) wrote in message news:<23151-3F53CBD1-700[at]storefull-2372.public.lawson.webtv.net> ...
- quote -

One word: Risk

mark0young[at]aol.com (Mark0Young) writes:

- quote -

Which, for the record, means a guaranteed minimum
return of 2^(1/20) - 1 = 0.035265 = 3.5265% per annum,
though you're only guaranteed that floor if you hold for
at least 20 years, as I understand it.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

I-bonds have many advantages, but don't expect the current yield
to hold. The yield is CPI (lagging) + a real yield which is now
1.1%. The CPI component is now 3.54% and will surely go down
in November. If you buy I-bonds, buy on the basis of their real
yield. I won't predict what will happen to the 1.1% -- it is not
a market rate, but is set by the Treasury.

Because they reprice twice a year (May 1 and November 1), I-bond rates
lag when interest rates change quickly. When interest rates plunged in
2001, you could get I-bonds paying real 3% (that is, CPI plus 3%) if you
bought before they repriced. I bought the legal limit, and wish I had
maxed out a bit earlier when they were paying real 3.6%.

Details at http://www.publicdebt.ustreas.gov/com/comi0503.htm.

David
~
~

~
~

Rich Carreiro wrote:
- quote -


And don't forget tax-deferred growth, with compounding of your earnings
for up to 30 years. Savings bonds are one of the rare income investments
that do that even though they sit outside an IRA, annuity, or other
tax-deferred wrapper.

Plus earnings can be tax-free if used to pay college tuition, for
taxpayers who qualify.

Plenty to like about I-bonds, at least for some of your
conservative/safe dollars.

-Tad

kathyae[at]webtv.net (kat) writes:

- quote -

The subject of this thread is "I-Bonds". Do you know what they are?

Hint -- they pay a fixed *real* return, not a fixed *nominal* return.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

I'm no lawyer but your suggested approach is not consistant with what I
learned in various Business Law classes I took while earning my MBA but as I
said before ""You can use a "screen print" for all your internet financial
and legal affairs if you wish. It's OK with me but I'll pass."".


"kao" <kao[at]yahoo.com> wrote in message
news:Xns93E9A22637DCEkaoyahoocom[at]207.217.77.101...
- quote -

kathyae[at]webtv.net (kat) writes:

- quote -

How about a guaranteed real return, zero risk of default,
and guaranteed not to lose any money?

- quote -

I-bonds currently pay 4.66%. How far out the yield curve do you have
to get to get a high-rated corporate bond with a 4.66% yield to
maturity? And what do you think will happen to the value of that bond
when interest rates rise? Remember, if a negotiable bond has a
duration of N years, its value will drop by N% for every percentage
point increase in interest rates. That doesn't happen with savings
bonds.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

hmmm... why would anyone wanna buy an I-bond?... what is sooo
appealing?... aren't there high rated corporate bonds paying more, or
how 'bout a royalty trust, or a decent dividend stock like hawaiian
electric, or perhaps a Lp such as buckeye partners, or how 'bout a
treasury note... why an I-bond?...

Nothing legal about it. About as useful as an old Sears catalog page in an
outhouse. You can use a "screen print" for your financial and legal affairs
if you wish. It's OK with me but I'll pass..


"kao" <kao[at]yahoo.com> wrote in message
news:Xns93E961250C2D9kaoyahoocom[at]207.217.77.101...
- quote -

I don't have a problem with an electronic checking account where I have
continuing transactions but I am only comfortable with an investment account
providing paper certificates or, at a minimum, quarterly paper statements
with an annual summary. It leaves something for the executor of an estate or
surviving family members.

...
"Mark0Young" <mark0young[at]aol.com> wrote in message
news:20030831183346.23171.00000411[at]mb-m05.aol.com...
- quote -

mark0young[at]aol.com (Mark0Young) writes:

- quote -

Normally, I'm in favor of things like this. But I really don't like
the "book entry" program as it currently stands. Why? Because as far
as I can tell, there's no paper trail at all.

Some time ago I opened a TreasuryDirect savings bond account and for a
test bought $40 work of I-bonds. I got NO physical confirmation of
the account opening, NO physical confirmation of the link-up to my
checking account, and NO physical confirmation of the purchase. I
sent email to "customer service" and they replied that this was all
normal and that no paper would be sent out at all.

I'm not willing to trust any meaningful amount of money to a system
like that.

And I'm not afraid of electronic financial transactions. I deal with
my brokerage account (at Fido) almost exclusively online, have a
savings account with ING Direct, etc. And while ING does not send
physical statements, and you can tell Fido not to, they DO send out
physical notices of account openings, address or other account info
changes, linkages to checking accounts, etc.

I hope they fix this, because I'd love to convert my paper savings
bonds to book-entry (something I'm sure they'll allow eventually), but
I won't do it with the way the system is now.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

In article <20030825223040.21270.00000694[at]mb-m10.aol.com> , gindie[at]aol.com
(Gindie) writes:

- quote -

Actually, in 2003, you can buy up to $30,000 in paper Series I Savings bonds
through Savings Bonds Direct or one of the other methods of buying paper
savings bonds, PLUS up to $30,000 in "book entry" (paperless) Series I Savings
Bonds through Treasury Direct. That means an individual can buy up to $60,000
of Series I Savings bonds in the current year. Double that for Spusal purchases
(even if you are listed as the co-owner--the limit is based on the SSN of the
first person listed).

Likewise, you can purchase $30,000 issue price of paper Series EE Savings Bonds
(increased from $15,000 since May 2003) through Savings Bonds Direct and other
paper Savings Bonds purchase methods and $30,000 issue price of "Book entry"
(paperless) Savings Bonds through Treasury Direct. (Again, double that for
spouse purchasing half of them.)

So a single person could potentially purchase up to $120,000 in Savings Bonds;
a couple, $240,000.

Source of information: "Frequently Asked Questions / Changes in the Savings
Bond Program" at http://www.publicdebt.treas.gov/sav/sbregfaq.htm

The "Book Entry" (paperless or "electronic") form of Savings Bonds have to be
purchased through Treasury Direct http://www.treasurydirect.com and are funded
exclusively by direct debit of your bank account.

The paper savings bonds can be purchased using a credit card through Savings
Bonds Direct http://www.publicdebt.treas.gov/sav/sav.htm (phased out at 3pm EST
December 30, 2003) or through many credit unions and banks, "Easy Saver"
(direct debit of bank account, no new customers after December 30, but periodic
purchases can also be set up through Treasury Direct for "book entry" Savings
Bonds), and, offered by some employers, through a Payroll Savings Plan.

But, at least between now and December 30, 2003, the limit is essentially
double of what it usually is.

Mark A. Young

1) I-Bonds are a type of savings bond, so they are about as safe as you can
have.

2) Their rate of return is composed of two parts, a fixed part established at
the time you purchase and a floating part that is adjusted every 6 months. The
current total of the 2 parts is the 4.66% you read. It will be adjusted again
this fall.

3) You MUST hold the bond for at least 1 year. You can hold for as much as 30
years.

4) If you cash in a bond before 5 years, you will forfeit the most recent 3
months worth of interest.

5) You cannot purchase more than $30,000 in bonds per person per year.

Hello,

In today's market conditions, the fixed-deposit-CDs do not
give more than say 1 or 1.5% or very near to this.

Just read about the I-Bond in the news paper. When checked
the current rate-of-return, it is yielding 4.66%.

What all are the considerations for selecting the I-Bonds?
Also, is this a good time to be in I-Bonds, as the rate-of-
return of this investment is better than the CDs. Is this
investment equally safe as the CDs? If anybody knows about
the historic rate-of-return, it will help evaluate this one
far more better.

Thanks very much.