Bogleheads

[caaaad]

5000- 2009 bonds 0%
5000-2008 bonds 0%
5000-2006 bonds 0%
5000-2005 bonds 0%
5000-2003 bonds 0%
5000-2002 partial 0% some 4.68%
5000-2000 bonds 0 %
I also hold ee bonds in 2005 2005 earning 1.64% and 2.19
I feel like I am doing the government a great favor. I also am thinking about dumping 90% of my ibonds and putting into vanguard tot bond.
My question is should I cash these in and reinvest the new ibonds and if so when, or should I just keep holding these turkeys and I understand I will get the inflation amount? I really could use some good feedback and I thank you for your opinions

[stevewolfe]

I have 23 I-Bonds as well. You are doing yourself a favor to keep them in my opinion. They are returning 0% for 6 months, however, why is that? It's because the CPI-U showed deflation of greater than 5.50% for the 6 month period (September 2008 to March 2009).

So lets us an example - an I-bond purchased in April 2008 pays 1.1% fixed + inflation. The inflation adjustment for the period mentioned above was -5.56% - deflation. So you'd expect the I-Bond to return -4.46% (-5.56% + 1.1%), however, I-Bonds have a protection that limits them to returning 0%. So the Inflation indexed bond is now also protecting you from a loss due to deflation.

That's a good deal in my opinion.

[Sheepdog]

You do know that your next 6 months inflation component will be 3.07% added to the fixed component, don't you? Where else can you get that rate for no risk.

Look at this page from Savings Bond Advisor on I bond rates http://www.savings-bond-adviso....-03-ee-12/ to see what the composite rates will be for your bonds.
Jim
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Happiness is not having what you want.
It's wanting what you have.
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Look to the future because that is where you will spend the rest of your life.

[caaaad]

Based on what you have posted it seems like they are worth keeping. Thank you for your opinions

[nisiprius]

Think in real (inflation-adjusted) dollars. Always, always, alway think in real dollars. In real dollars, our I bonds are doing as well as ever.
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Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

[tarnation]

I bonds are better than ever! Aren't we just now exiting the highest real return in history of I bonds (due to the 0% floor)?
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[hamishdad]

I currently do not own I-bonds, but they look like a good option, especially for someone like me who is concerned about losing principal if interest rates rise quickly.

However, I am a little concerned about the fixed rate for new I-bonds being only.3%. If someone were to purchase these bonds now and the fixed rate for new I-bonds is higher a year or two from now, should the .3% fixed rate bonds be cashed in to purchase bonds at the higher fixed rate, or should you just buy and hold them - regardless of the fixed rate?

[Mel Lindauer]

[stevewolfe]

[Lbill]

Issue______Fixed Rate
2000...........3.40% - 3.60%
2003...........1.10%
2005...........1.00% - 1.20%
2006...........1.40%
2008...........0 - 0.70%
2009...........0.10%

The only I-Bonds I'd consider selling of this bunch would be the May, 2008 (with 0% fixed rate) or the May, 2009 (with 0.10% fixed rate).

The others still look pretty good. You would have to be completely nuts or broke to sell the 2000s. I wouldn't sell anything unless you can replace it with a higher fixed rate I-Bond. Then you have to consider the annual limit of $10K (paper plus electronic) and how much you want to accumulate in I-Bonds. I have the November, 2008 with a 0.70% fixed rate. The November, 2009 rate is just 0.30% so I'm not selling them anytime soon either. You just need to get through the 6-month "valley of death" in which everybody's I-Bonds are not earning any interest.
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"Whenever you find yourself on the side of the majority, it is time to pause and reflect." ~ Mark Twain
"A foole and his money is soone parted." - J. Bridges, 1587