EE/I Bond Rate Predictions for May 1 2015?

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JamesSFO
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EE/I Bond Rate Predictions for May 1 2015?

Post by JamesSFO » Thu Mar 26, 2015 11:13 am

Any thoughts on whether to buy EE/I bonds now vs. after May 1? E.g. interest rate tea-leaf predictions

poker27
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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by poker27 » Thu Mar 26, 2015 12:14 pm

I was considering holding out to see what happened in May, but someone else asked this question here, and the bulk of the responses were that the rate will not go up.

So I just requested the transfer to my checking and will pull the trigger this month

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by Grt2bOutdoors » Thu Mar 26, 2015 12:23 pm

Flat on the EE bond. Zero on the I bond. Ten year treasury is at 1.99 (market is not pricing in a rate increase "yet"). 30 year T-Bond is at 2.5%. See you next year.
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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by JamesSFO » Thu Mar 26, 2015 12:28 pm

Thanks I will pull the trigger on my purchases now, I guess it was wishful thinking that it would be more...

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by dh » Thu Mar 26, 2015 12:44 pm

My prediction is 0% fixed, and given that the CPI-U trend is negative (-1.39%; February 2015 = 234.722 down from 238.031 in September 2014), I am predicting the composite return will be 0% (for most, if not all, I-bonds). So, I am going to hold off buying and see what happens in November.

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by JamesSFO » Thu Mar 26, 2015 1:00 pm

I buy 2x/year for each once in the trust and once in my personal account

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by VictoriaF » Thu Mar 26, 2015 7:57 pm

My predictions for I Bonds fixed rates:
0.0% - 1 May 2015
0.1% - 1 Nov 2015

Victoria
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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by BigSaver » Mon Apr 20, 2015 7:47 am

Now that the March CPI # is out, we know the 6-month CPI change (-0.80%), and therefore we know that the May 2015 I-Bond rate's variable portion will be 0%.

My I-Bond purchase strategy in an ultra-low interest rate environment is to buy before November only if the fixed rate > 0. I can stomach 0% for 6 months only if I'm getting a >0% fixed portion over the life of the bond.

If the fixed rate is 0% for both the May 2015 & the November 2015 series, well, then I'll buy in November if the variable rate >0%. Otherwise, I will skip I-Bonds in 2015.

My predictions for the fixed portion of the 2015 I-Bond rate:
= 0.1% in May 2015
= 0.0% in November 2015

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by BigSaver » Mon Apr 20, 2015 9:07 am

Technical correction to the first sentence in my previous post:

Now that the March CPI # is out, we know the 6-month CPI change (-0.80%), and therefore we know that the May 2015 I-Bond rate's variable portion will zero out the fixed portion if there is one, yielding an overall rate of 0%. Difficult to see how it could be anything but 0%.

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by JamesSFO » Mon Apr 20, 2015 6:41 pm

Thanks!

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by BigSaver » Fri May 01, 2015 9:37 am

BigSaver wrote: My predictions for the fixed portion of the 2015 I-Bond rate:
= 0.1% in May 2015
= 0.0% in November 2015
I was wrong again! Fixed rate for May 1st bonds is 0%. I will wait & see what November 1st brings. No new I-Bonds for me (yet) in 2015.

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by Average Investor » Fri Oct 09, 2015 10:16 am

Renewing this thread. Does anyone know when the November 2015 iBond rate will be announced? I am thinking of moving my iBond funds to the NWFCU 3.04% 3 year CD . . . .
Tomorrow never knows.

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by Coles » Fri Oct 09, 2015 11:04 am

Average Investor wrote:Renewing this thread. Does anyone know when the November 2015 iBond rate will be announced? I am thinking of moving my iBond funds to the NWFCU 3.04% 3 year CD . . . .
The new fixed rate will be announced Monday, November 2.
The inflation adjustment will be calculable on October 15 when the BLS releases the September CPI.

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by feh » Fri Oct 09, 2015 12:18 pm

I'm planning on buying I Bonds next month regardless of the return. Once 2016 arrives, you've lost your chance to buy 2015 bonds.

In other words, if your portfolio has a need for inflation-adjusted bonds, don't let the current rate stop you.

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by ThisTimeItsDifferent » Fri Oct 09, 2015 10:09 pm

"Buy late in the month, redeem early in the month," right, since interest is calculated on calendar month intervals?

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by Average Investor » Sat Oct 10, 2015 12:46 pm

feh wrote:I'm planning on buying I Bonds next month regardless of the return. Once 2016 arrives, you've lost your chance to buy 2015 bonds.

In other words, if your portfolio has a need for inflation-adjusted bonds, don't let the current rate stop you.
I understand this rationale. But with close to 2/3 of my portfolio in tax deferred space already, I am tempted to put my small allotment of 0% return ibonds to what seems to be a better use (for me anyway). The ibond allocation is less than 1.5% of my portfolio so it probably does not really matter either way.
Tomorrow never knows.

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by EMDW » Sat Oct 10, 2015 4:28 pm

What's wrong with EE bonds per this article? I thinking about buying for I and EE bonds next month. Thanks.
http://www.huffingtonpost.com/terry-sav ... 50060.html

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by supernova » Sat Oct 10, 2015 4:31 pm

sari wrote:What's wrong with EE bonds per this article? I thinking about buying for I and EE bonds next month. Thanks.
http://www.huffingtonpost.com/terry-sav ... 50060.html
EE bonds are the best rate you can get right now. 20 years, 3.53%, with no credit or interest rate risk. Just you gotta hold them 20 years.

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by trueblueky » Sat Oct 10, 2015 4:35 pm

ThisTimeItsDifferent wrote:"Buy late in the month, redeem early in the month," right, since interest is calculated on calendar month intervals?
Yes

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by VictoriaF » Sat Oct 10, 2015 5:41 pm

sari wrote:What's wrong with EE bonds per this article? I thinking about buying for I and EE bonds next month. Thanks.
http://www.huffingtonpost.com/terry-sav ... 50060.html
Nothing is particularly wrong with EE bonds, but they tie up your money for 20 years, during which time interest rates are likely to rise. I like I Bonds because they protect from inflation; $10,000 invested today will return $10,000 real in 30 years.

Victoria
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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by dodecahedron » Sat Oct 10, 2015 6:08 pm

supernova wrote:
sari wrote:What's wrong with EE bonds per this article? I thinking about buying for I and EE bonds next month. Thanks.
http://www.huffingtonpost.com/terry-sav ... 50060.html
EE bonds are the best rate you can get right now. 20 years, 3.53%, with no credit or interest rate risk. Just you gotta hold them 20 years.
Plus, they are tax-deferred for federal income taxes and interest is exempt from state income tax.
VictoriaF wrote:
sari wrote:What's wrong with EE bonds per this article? I thinking about buying for I and EE bonds next month. Thanks.
http://www.huffingtonpost.com/terry-sav ... 50060.html
Nothing is particularly wrong with EE bonds, but they tie up your money for 20 years, during which time interest rates are likely to rise. I like I Bonds because they protect from inflation; $10,000 invested today will return $10,000 real in 30 years.

Victoria
Who can know for sure whether interest rates in general are likely to rise or not. However, the implicit interest rate on EE bonds automatically rises over time, so even if interest rates rise substantially some years down the road, a current investment in EE bonds may well remain quite competitive. (For example, in ten years, a current investment in EE bonds will have an implicit IRR of 6.86% over its remaining 10 year term. In 15 years, a current investment will have have an implicit IRR of 13.8% over its remaining 5 year term. In 19 years, it will have an implicit IRR of 89% over its remaining one year term.) And if we get in a Japan style deflationary spiral, having some EE bonds in the portfolio will seem like worthwhile diversification (along with ibonds, TIPS, and liquid/short term nominals and CDs to deal with inflation if that scenario arises.)

(Edited to correct decimal point errors!)

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by Angst » Sat Oct 10, 2015 7:08 pm

VictoriaF wrote:Nothing is particularly wrong with EE bonds, but they tie up your money for 20 years, during which time interest rates are likely to rise. I like I Bonds because they protect from inflation; $10,000 invested today will return $10,000 real in 30 years.

Victoria
"Likely"? I dunno, not to my knowledge. Anyhow, for one who's planning to hold their 0% fixed rate I Bonds for 30 years, they might also want to consider 30-year TIPS at auction. TIPS can also return that $10,000 real at maturity, plus a solid yield of over 1% (since about the start of June this year) paid semi-annually. Even 10-year TIPS at auction this September were yielding 0.6%. No built-in tax deferral or academics use exemption though.

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Re: EE/I Bond Rate Predictions for Nov 1 2015?

Post by tfb » Thu Oct 15, 2015 7:48 am

Coles wrote:
Average Investor wrote:Renewing this thread. Does anyone know when the November 2015 iBond rate will be announced? I am thinking of moving my iBond funds to the NWFCU 3.04% 3 year CD . . . .
The new fixed rate will be announced Monday, November 2.
The inflation adjustment will be calculable on October 15 when the BLS releases the September CPI.
It looks like 1.55% if you buy in November. I predict the fixed rate will stay at 0%.
Harry Sit, taking a break from the forums.

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Re: EE/I Bond Rate Predictions for Nov 1 2015?

Post by feh » Thu Oct 15, 2015 7:52 am

tfb wrote: It looks like 1.55% if you buy in November. I predict the fixed rate will stay at 0%.
Not just November, though - that's the rate if you buy from Nov through April, right?

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Re: EE/I Bond Rate Predictions for Nov 1 2015?

Post by tfb » Thu Oct 15, 2015 7:54 am

feh wrote:
tfb wrote: It looks like 1.55% if you buy in November. I predict the fixed rate will stay at 0%.
Not just November, though - that's the rate if you buy from Nov through April, right?
Yes, the usual six-month cycles. 0% for six months if you buy before Nov 1.
Harry Sit, taking a break from the forums.

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by JamesSFO » Fri Oct 16, 2015 7:02 am

More predictions on I Bond rates, probably 0% fixed still - https://www.depositaccounts.com/blog/20 ... y-fed.html

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by Angst » Fri Oct 16, 2015 8:01 am

JamesSFO wrote:More predictions on I Bond rates, probably 0% fixed still - https://www.depositaccounts.com/blog/20 ... y-fed.html
The article predicts 1.54% inflation rate this November, like tfb said, i.e. for the next 6 months; zero fixed rate assumed too. Just do not buy in October, wait a month if you want I Bonds.

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Re: EE/I Bond Rate Predictions for May 1 2015?

Post by Spirit Rider » Fri Oct 16, 2015 8:48 am

Small semantic point. This is not a prediction. It is what the rate will be based on the 10/15 CPI release. It is a simple calculation and is either correct or not. I have seen the same rate quoted in several places. So I would assume 1.54% is the correct rate.

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Re: EE/I Bond Rate Predictions for Nov 1 2015?

Post by Average Investor » Sat Oct 17, 2015 1:16 pm

tfb wrote:
Coles wrote:
Average Investor wrote:Renewing this thread. Does anyone know when the November 2015 iBond rate will be announced? I am thinking of moving my iBond funds to the NWFCU 3.04% 3 year CD . . . .
The new fixed rate will be announced Monday, November 2.
The inflation adjustment will be calculable on October 15 when the BLS releases the September CPI.
It looks like 1.55% if you buy in November. I predict the fixed rate will stay at 0%.
Isn't the current composite rate for most recent issue ibonds 0%? Are we expecting a 1.5% jump based on inflation for the last 6 months?

Thank you.
Tomorrow never knows.

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Re: EE/I Bond Rate Predictions for Nov 1 2015?

Post by Mel Lindauer » Sat Oct 17, 2015 2:42 pm

Average Investor wrote:
tfb wrote:
Coles wrote:
Average Investor wrote:Renewing this thread. Does anyone know when the November 2015 iBond rate will be announced? I am thinking of moving my iBond funds to the NWFCU 3.04% 3 year CD . . . .
The new fixed rate will be announced Monday, November 2.
The inflation adjustment will be calculable on October 15 when the BLS releases the September CPI.
It looks like 1.55% if you buy in November. I predict the fixed rate will stay at 0%.
Isn't the current composite rate for most recent issue ibonds 0%? Are we expecting a 1.5% jump based on inflation for the last 6 months?

Thank you.
Yes, all I Bonds get the currently-reported inflation adjustment for six months, starting on their next six or twelve month anniversary of issue. Therefore, it's just a matter of when that rate will become part of any individual I Bond composite rate, since it's based on the month of issue.
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Re: EE/I Bond Rate Predictions for Nov 1 2015?

Post by Average Investor » Sun Oct 18, 2015 6:11 am

Mel Lindauer wrote:
Average Investor wrote:
tfb wrote:
Coles wrote:
Average Investor wrote:Renewing this thread. Does anyone know when the November 2015 iBond rate will be announced? I am thinking of moving my iBond funds to the NWFCU 3.04% 3 year CD . . . .
The new fixed rate will be announced Monday, November 2.
The inflation adjustment will be calculable on October 15 when the BLS releases the September CPI.
It looks like 1.55% if you buy in November. I predict the fixed rate will stay at 0%.
Isn't the current composite rate for most recent issue ibonds 0%? Are we expecting a 1.5% jump based on inflation for the last 6 months?

Thank you.
Yes, all I Bonds get the currently-reported inflation adjustment for six months, starting on their next six or twelve month anniversary of issue. Therefore, it's just a matter of when that rate will become part of any individual I Bond composite rate, since it's based on the month of issue.
Thank you!
Tomorrow never knows.

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