New ibond rates for nov 2013

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nwffdiver
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New ibond rates for nov 2013

Post by nwffdiver » Sat Oct 19, 2013 3:33 pm

Has anyone seen the new rates for ibonds? I know they usually come out by the 15th of the month prior (maybe the government shutdown). I looked around the TD website and couldn't find anything new.

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HueyLD
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Re: New ibond rates for nov 2013

Post by HueyLD » Sat Oct 19, 2013 3:46 pm

............
Last edited by HueyLD on Sun Feb 08, 2015 7:15 am, edited 1 time in total.

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Rainier
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Re: New ibond rates for nov 2013

Post by Rainier » Sat Oct 19, 2013 3:48 pm

Any guesses on what the rate will be? Higher or lower than the current rate?
- Bill

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Sammy_M
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Re: New ibond rates for nov 2013

Post by Sammy_M » Sat Oct 19, 2013 4:24 pm

Rainier wrote:Any guesses on what the rate will be? Higher or lower than the current rate?

The last 5 months have been low. http://data.bls.gov/timeseries/CUUR0000 ... w=pct_1mth
tfb guesses it'll be slightly down. http://thefinancebuff.com/september-cpi ... er-30.html

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Re: New ibond rates for nov 2013

Post by Sheepdog » Sat Oct 19, 2013 4:25 pm

Rainier wrote:Any guesses on what the rate will be? Higher or lower than the current rate?

Sure, I can guess. The fixed will stay at zero and the inflation component will be lower because inflation has been lower.

edit:
According to I Bond Info's calculation http://www.ibonds.info/I-Bonds-and-CPI-U.aspx the inflation component will be 1.53%.
Forget that. The site's data has not been updated for the current CPIs
Last edited by Sheepdog on Sat Oct 19, 2013 4:38 pm, edited 2 times in total.
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Re: New ibond rates for nov 2013

Post by sscritic » Sat Oct 19, 2013 4:29 pm

Rainier wrote:Any guesses on what the rate will be? Higher or lower than the current rate?

As the saying goes, your guess is as good as mine. Why don't you start us off? What's your guess?

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Re: New ibond rates for nov 2013

Post by LK2012 » Sat Oct 19, 2013 4:30 pm

The September 2013 CPI-U will be announced on Wednesday, October 30, 2013 at 8:30 AM. It was originally scheduled for October 16, I think, but the shutdown obviously threw a wrench in that timeline.

So that won't leave a lot of time to make your decision to buy in October vs November !

http://www.bls.gov/cpi/

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Re: New ibond rates for nov 2013

Post by LadyGeek » Sat Oct 19, 2013 7:16 pm

This thread is now in the Investing - Theory, News & General forum (interest rates).
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Re: New ibond rates for nov 2013

Post by Sammy_M » Sun Oct 20, 2013 7:13 am

LK2012 wrote:The September 2013 CPI-U will be announced on Wednesday, October 30, 2013 at 8:30 AM. It was originally scheduled for October 16, I think, but the shutdown obviously threw a wrench in that timeline.

So that won't leave a lot of time to make your decision to buy in October vs November !

http://www.bls.gov/cpi/

If you setup an order for 10/31 do you get that date or does it take a day or two to clear?

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Re: New ibond rates for nov 2013

Post by Geist » Sun Oct 20, 2013 8:18 am

Sammy_M wrote:
LK2012 wrote:The September 2013 CPI-U will be announced on Wednesday, October 30, 2013 at 8:30 AM. It was originally scheduled for October 16, I think, but the shutdown obviously threw a wrench in that timeline.

So that won't leave a lot of time to make your decision to buy in October vs November !

http://www.bls.gov/cpi/

If you setup an order for 10/31 do you get that date or does it take a day or two to clear?

My understanding (and my experience) is that the scheduled transaction date is the effective date of the bond, unless your selected date is a weekend or federal holiday. But what seems to be overlooked is the nature of how I-Bond interest rates are implemented. Upon purchase if anI-Bond, you are guaranteed 6 months of interest at the stated rate on the execution day of the bond. However, 6 months after purchase, it doesn't skip to the then-current rate. You then receive the rate based on your fixed component (0.0%, which isn't changing in the next 2 weeks) and the "next-in-line" inflation component. Buy today, you get an I-bond earning 1.18% for 6 months, then whatever the next rate happens to be. If it comes to be 1.58%, no worries, you'll get that rate for 6 months after biding your time for the 1st 6 months. Lower, say at .78%? Well shoot, you'll be stuck with the lower rate 6 months from now.

BL: Not worth the heartache. The difference in interest gained over 6 months on no more than $10k is meaningless in the long run, which all of us here are known for -- our exceeding faith in the long view, vs. day-to-day timing... So as an (admittedly recent) Boglehead, I say if you want/need/plan to buy some I-Bonds, just buy them now and start earning your interest payments. You'll get (or be stuck with) the new rate in 6 months anyway. My purchases are in....are yours?

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Re: New ibond rates for nov 2013

Post by jeffyscott » Sun Oct 20, 2013 8:25 am

HueyLD wrote:Since federal employees were furloughed for 16 days, it would be reasonable to guess that the new I bond rates will be announced 16 days after the original date.


Or since they get paid for the "furlough", perhaps they will be working extra hours to make up for the missed time and it won't take 16 days to catch up?
press on, regardless - John C. Bogle

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Re: New ibond rates for nov 2013

Post by Spirit Rider » Sun Oct 20, 2013 8:52 am

There are two issues that I do not know the answers to.

First, past experience shows that an "initiated" purchase will take two business days to process. So if you initiate a purchase on October 30th, The bond's purchase date would normally be November 1st. However, in one month in the recent past (for the first time in my knowledge), Treasury Direct felt a large number of people did not understand the normal delay, so they made an exception and granted those purchases same month purchase date.

Maybe someone could inquire of Treasure Direct that given the extremely unique circumstances (CPI-U released 10/30), would they grant an exception and make purchases made by 10/31 to have an October purchase month. No guarantees, but certainly a possibility.

Second, given Geist's experience of scheduled purchases, could you schedule a purchase for October 31st, and cancel if necessary when the CPI-U is released on October 30th?

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Re: New ibond rates for nov 2013

Post by Mudpuppy » Sun Oct 20, 2013 8:36 pm

I wouldn't worry too much about it since the new inflation component rate is likely to be less than the current rate, and you'll cycle around to the new rate 6 months down the road for October bonds anyways. So really the question of buying now or buying in November only affects the interest earned over the first 6 months. We're talking about at most a difference of $60 interest over the first 6 months on a $10,000 I-Bond, which would only come into play if the November inflation component were 0%.

$60 is nothing to sneeze at, but neither is it much to lose sleep over given the size of the I-Bond involved. I think it's unlikely the November inflation component would be 0% (although I certainly agree with the prediction that the fixed component will be 0%), so the "loss" over the first 6 months is likely to be less.

Now, if the inflation component were predicted to be higher (or if the fixed component was predicted to go above 0%), then I think the timing of the purchase would be more important. You'd get a better return by deferring the purchase to the next month. But buying early when the interest component is going down doesn't do much but delay the inevitable.

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Re: New ibond rates for nov 2013

Post by morbster » Mon Oct 21, 2013 6:18 pm

I apologize for slightly hijacking this thread, but I figured this is the most relevant place to ask. If you buy $10k worth of ibonds prior to the New Year, could you turn around and by an additional $10k at the beginning of next year?

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Re: New ibond rates for nov 2013

Post by jeffyscott » Mon Oct 21, 2013 6:33 pm

Yes, $10K is a calendar year limit.
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Re: New ibond rates for nov 2013

Post by sscritic » Mon Oct 21, 2013 6:34 pm

I like to ask the Treasury Department questions about savings bonds.
The principal amount of book-entry savings bonds that you may acquire in any calendar year is limited ...

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Re: New ibond rates for nov 2013

Post by morbster » Mon Oct 21, 2013 6:38 pm

jeffyscott wrote:Yes, $10K is a calendar year limit.


Thanks jeffyscott, I appreciate your help.

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Re: New ibond rates for nov 2013

Post by Phineas J. Whoopee » Mon Oct 21, 2013 6:56 pm

morbster wrote:I apologize for slightly hijacking this thread, but I figured this is the most relevant place to ask. If you buy $10k worth of ibonds prior to the New Year, could you turn around and by an additional $10k at the beginning of next year?

In the past two years it was possible to buy an additional $5,000 with your federal income tax refund. You'd have to overpay to begin with to get that much back. The option of I Bonds for a refund existed before the 2011 tax year, but until then it didn't increase the allowable limit.

I've checked just this moment and the best advance indicator I know of, the final 2013 form 8888, has not yet been posted by the IRS. There's a draft from June, but it says right on it that it's not reliable.

Nothing stops the treasury secretary from changing the maximum annual limit, up or down, including to zero. Congress's law says it's entirely at his discretion.

We'll have to wait and see how things go.

PJW

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Re: New ibond rates for nov 2013

Post by nwffdiver » Thu Oct 24, 2013 9:23 pm

Any updates? On the rates? I already bought 2k this month, if the rate goes down/up ...ok have 2k more for this year. :happy

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Re: New ibond rates for nov 2013

Post by Sheepdog » Thu Oct 24, 2013 9:57 pm

nwffdiver wrote:Any updates? On the rates? I already bought 2k this month, if the rate goes down/up ...ok have 2k more for this year. :happy
Will be announced 10/30/13, it is said...
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Re: New ibond rates for nov 2013

Post by Mel Lindauer » Thu Oct 24, 2013 10:03 pm

Don't forget that if you buy on or before the last date of this month, you'll earn a full month's worth of interest for as little as one day. Not huge at the current rates, but still not something to overlook.
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Re: New ibond rates for nov 2013

Post by Electron » Fri Oct 25, 2013 12:29 pm

The I-Bond rate based on the March-August CPI-U would be 0.94%. That assumes a Fixed Rate of 0%.

The September CPI-U should be available next week.
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Re: New ibond rates for nov 2013

Post by MooreBonds » Sat Oct 26, 2013 7:56 pm

HueyLD wrote:
nwffdiver wrote:Has anyone seen the new rates for ibonds? I know they usually come out by the 15th of the month prior (maybe the government shutdown). I looked around the TD website and couldn't find anything new.

Since federal employees were furloughed for 16 days, it would be reasonable to guess that the new I bond rates will be announced 16 days after the original date.


The fixed rate portion of the I-series bonds are always issued on May 1 and November 1:

http://www.treasurydirect.gov/news/pres ... atespr.htm

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Re: New ibond rates for nov 2013

Post by HopeToGolf » Sun Oct 27, 2013 5:12 pm

jeffyscott wrote:
HueyLD wrote:Since federal employees were furloughed for 16 days, it would be reasonable to guess that the new I bond rates will be announced 16 days after the original date.


Or since they get paid for the "furlough", perhaps they will be working extra hours to make up for the missed time and it won't take 16 days to catch up?


That's funny....not going to happen. Can you imagine this situation in industry....no pay and then the workers would need to figure out a way to hit the deadline.

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Re: New ibond rates for nov 2013

Post by Spirit Rider » Sun Oct 27, 2013 5:30 pm

HopeToGolf wrote:
jeffyscott wrote:
HueyLD wrote:Since federal employees were furloughed for 16 days, it would be reasonable to guess that the new I bond rates will be announced 16 days after the original date.


Or since they get paid for the "furlough", perhaps they will be working extra hours to make up for the missed time and it won't take 16 days to catch up?


That's funny....not going to happen. Can you imagine this situation in industry....no pay and then the workers would need to figure out a way to hit the deadline.
What do you mean no pay. They all received 100% pay retroactively. They essentially received extra vacations days.

If that situation happen in industry (wait it did, I worked for a few startups). I would (and did) consider it a professional challenge to get the work out ASAP.

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Re: New ibond rates for nov 2013

Post by Iorek » Sun Oct 27, 2013 5:44 pm

Spirit Rider wrote:
HopeToGolf wrote:
jeffyscott wrote:
HueyLD wrote:Since federal employees were furloughed for 16 days, it would be reasonable to guess that the new I bond rates will be announced 16 days after the original date.


Or since they get paid for the "furlough", perhaps they will be working extra hours to make up for the missed time and it won't take 16 days to catch up?


That's funny....not going to happen. Can you imagine this situation in industry....no pay and then the workers would need to figure out a way to hit the deadline.
What do you mean no pay. They all received 100% pay retroactively. They essentially received extra vacations days.

If that situation happen in industry (wait it did, I worked for a few startups). I would (and did) consider it a professional challenge to get the work out ASAP.


I'm sure Treasury views it the same way, but we are headed off track here.

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Re: New ibond rates for nov 2013

Post by sscritic » Sun Oct 27, 2013 5:52 pm

Can anyone tell me the new iBond rate for May 2014?

[I thought I would get an early start on what inevitably will be a new thread next week.]

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Re: New ibond rates for nov 2013

Post by neurosphere » Sun Oct 27, 2013 6:34 pm

sscritic wrote:Can anyone tell me the new iBond rate for May 2014?

[I thought I would get an early start on what inevitably will be a new thread next week.]

You stole my thunder, sscritic. I had already written that post, and it was waiting in my drafts folder for Nov 1st. :D
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Re: New ibond rates for nov 2013

Post by Phineas J. Whoopee » Mon Oct 28, 2013 12:22 pm

sscritic wrote:Can anyone tell me the new iBond rate for May 2014?

[I thought I would get an early start on what inevitably will be a new thread next week.]

I could tell you, but then you'd have to kill me.
PJW

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Re: New ibond rates for nov 2013

Post by crowd79 » Mon Oct 28, 2013 1:03 pm

Low inflation? Baloney. Its the government cheating investors out of higher returns to save money themselves. Costs for food, gas and insurance keep skyrocketing and the saver gets the shaft as usual.

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Re: New ibond rates for nov 2013

Post by Grt2bOutdoors » Mon Oct 28, 2013 1:20 pm

Do you have a better alternative?
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Re: New ibond rates for nov 2013

Post by Alex Frakt » Mon Oct 28, 2013 1:30 pm

crowd79 wrote:Low inflation? Baloney. Its the government cheating investors out of higher returns to save money themselves. Costs for food, gas and insurance keep skyrocketing and the saver gets the shaft as usual.

Conspiracy theories are off-topic, but enough people believe this particular one that it is worth addressing occasionally.

US inflation rates are based on publicly available definitions and publicly available pricing data. If you are going to make a claim that they are understating the inflation rate, you need to show what is wrong with the definition, what's wrong with the prices, or where they have miscalculated. There have been attempts to do this, but none of the so-proclaimed debunkers have stood up to the slightest scrutiny.

This has been discussed previously, see for example:
viewtopic.php?t=73943
viewtopic.php?t=73073

This is not to say that your personal inflation rate is an exact match for the national rate. Just that there is no evidence at all that the national rates are being manipulated.

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Re: New ibond rates for nov 2013

Post by Randomize » Mon Oct 28, 2013 1:44 pm

Alex Frakt wrote:Conspiracy theories are off-topic, but enough people believe this particular one that it is worth addressing occasionally.

US inflation rates are based on publicly available definitions and publicly available pricing data. If you are going to make a claim that they are understating the inflation rate, you need to show what is wrong with the definition, what's wrong with the prices, or where they have miscalculated. There have been attempts to do this, but none of the so-proclaimed debunkers have stood up to the slightest scrutiny.

This has been discussed previously, see for example:
viewtopic.php?t=73943
viewtopic.php?t=73073

This is not to say that your personal inflation rate is an exact match for the national rate. Just that there is no evidence at all that the national rates are being manipulated.


It's funny how the people who complain about inflation post-2008 never complain about how low their mortgage rates are or mention the fact that gas today is only more expensive compared to where it was in the middle of the recession rather than before the recession.

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Re: New ibond rates for nov 2013

Post by Sheepdog » Mon Oct 28, 2013 4:42 pm

People keep coming up with inflation shenanigans. I don't see it...We drive the car about the same....heat and light the house about the same.... Our personal inflation?. Here are a few items comparing the last 5 years. So far in 2013, it seems to be following.
I WILL ADD THE TOTAL OF ALL MY SPENDING AT THE BOTTOM WHICH INCLUDES EVERYTHING WHERE MY MONEY GOES (EXCEPT AUTO PURCHASES) INCLUDING TAXES, DONATIONS, VACATIONS, HOUSE MAINTENANCE, WINE, WOMEN AND ALL OTHER ENTERTAINMENT and we eat out a lot, attend lots of concerts and shows, professional football, etc. This is for 2 people. The one expense we don't have much of is income tax, plus of course, interest payments.
ITEM AND YEAR...........2012..............2011.................2010.................2009.....................2008

GROCERIES................5342..............5358.................5183.................5627.....................5294
GASOLINE..................1935..............2222.................1643.................1214....................1798
ELECTRICITY...............971...............929...................908..................835......................832
TELEPHONE & DSL........959...............917...................999..................1096.....................1010
GAS.........................762...............988...................920..................1193.....................1219
ALL SPENDING.......... 58,871............57,598...............66,788...............65,089...................63,723
CPI-U, when compared to my expenses, looks fine to me.
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Re: New ibond rates for nov 2013

Post by abracadabra11 » Tue Oct 29, 2013 10:33 am

Sheepdog wrote:People keep coming up with inflation shenanigans. I don't see it...We drive the car about the same....heat and light the house about the same.... Our personal inflation?. Here are a few items comparing the last 5 years. So far in 2013, it seems to be following.
I WILL ADD THE TOTAL OF ALL MY SPENDING AT THE BOTTOM WHICH INCLUDES EVERYTHING WHERE MY MONEY GOES (EXCEPT AUTO PURCHASES) INCLUDING TAXES, DONATIONS, VACATIONS, HOUSE MAINTENANCE, WINE, WOMEN AND ALL OTHER ENTERTAINMENT and we eat out a lot, attend lots of concerts and shows, professional football, etc. This is for 2 people. The one expense we don't have much of is income tax, plus of course, interest payments.
ITEM AND YEAR...........2012..............2011.................2010.................2009.....................2008

GROCERIES................5342..............5358.................5183.................5627.....................5294
GASOLINE..................1935..............2222.................1643.................1214....................1798
ELECTRICITY...............971...............929...................908..................835......................832
TELEPHONE & DSL........959...............917...................999..................1096.....................1010
GAS.........................762...............988...................920..................1193.....................1219
ALL SPENDING.......... 58,871............57,598...............66,788...............65,089...................63,723
CPI-U, when compared to my expenses, looks fine to me.

Unfortunately, single-point data is meaningless here. I'm sure there are others that can post figures that reflect a much higher personal inflation rate. The fact remains that nationally, inflation has been largely irrelevant in the past several years.

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Re: New ibond rates for nov 2013

Post by taegirain3 » Tue Oct 29, 2013 11:49 am

neurosphere wrote:
sscritic wrote:Can anyone tell me the new iBond rate for May 2014?


0% real.

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Re: New ibond rates for nov 2013

Post by Timoneer » Tue Oct 29, 2013 1:56 pm

Sammy_M wrote:If you setup an order for 10/31 do you get that date or does it take a day or two to clear?


I had set up an order in advance for today (10/29). The funds were withdrawn from my bank this morning, and checking my Treasury Direct acct, I see that the new Ibond is already registered, with an effective date of 10/1.

YMMV.

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Re: New ibond rates for nov 2013

Post by Mudpuppy » Tue Oct 29, 2013 2:38 pm

taegirain3 wrote:
neurosphere wrote:
sscritic wrote:Can anyone tell me the new iBond rate for May 2014?


0% real.

The answer that never gets old :)

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Re: New ibond rates for nov 2013

Post by crowd79 » Tue Oct 29, 2013 8:19 pm

Just read my local newspaper today. Electricity rates are going up an eye-popping 25% over the course of the next 3 years, or 8.5% per year.

Article:
http://www.miningjournal.net/page/content.detail/id/591902/Big-BLP-rate-hike-approved.html?nav=5006

Yeah, tell me there's no inflation or cost of living increase. :o

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Re: New ibond rates for nov 2013

Post by sscritic » Tue Oct 29, 2013 8:25 pm

Actually, 8.5% a year is 27.7% over 3 years. Don't forget the magic of compounding. This is a website devoted to financial education so we shouldn't overlook the basics.

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Re: New ibond rates for nov 2013

Post by jeffyscott » Tue Oct 29, 2013 8:33 pm

crowd79 wrote:Just read my local newspaper today. Electricity rates are going up an eye-popping 25% over the course of the next 3 years, or 8.5% per year.

Article:
http://www.miningjournal.net/page/content.detail/id/591902/Big-BLP-rate-hike-approved.html?nav=5006

Yeah, tell me there's no inflation or cost of living increase. :o



Commissioner Michael Coyne noted the BLP has had only one increase in the past 30 years.

So, that makes your long term figure for inflation in this particular commodity <1% per year, over the past 30 plus the next 3 years.
press on, regardless - John C. Bogle

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Re: New ibond rates for nov 2013

Post by Spirit Rider » Tue Oct 29, 2013 11:04 pm

crowd79 wrote:Just read my local newspaper today. Electricity rates are going up an eye-popping 25% over the course of the next 3 years, or 8.5% per year.

Article:
http://www.miningjournal.net/page/content.detail/id/591902/Big-BLP-rate-hike-approved.html?nav=5006

Yeah, tell me there's no inflation or cost of living increase. :o

Yes, but what percentage of your total expenses are your electricity expense. In my case it is about 1%. So it has a marginal effect on my personal inflation rate. Anecdotal information is just that anecdotal.

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Re: New ibond rates for nov 2013

Post by amfox1 » Wed Oct 30, 2013 7:44 am

September CPI-U is 234.149

March CPI-U was 232.773

That makes the next semiannual rate 0.59% (1.18% annualized), which is identical to the current semiannual rate.

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Re: New ibond rates for nov 2013

Post by tipswatcher » Wed Oct 30, 2013 8:21 am

September CPI-U is 234.149

March CPI-U was 232.773


Thanks.
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Re: New ibond rates for nov 2013

Post by pop77 » Wed Oct 30, 2013 8:21 am

If the variable portion is going to be same, it might be worth to wait and purchase in November with a small probability of the fixed rate will be greater than 0%. Yes you will loose one month interest but that is the price you pay for the small probability.

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Re: New ibond rates for nov 2013

Post by #Cruncher » Wed Oct 30, 2013 11:36 am

amfox1 wrote:That makes the next semiannual rate 0.59% (1.18% annualized), which is identical to the current semiannual rate.
Because it is rounded to two decimal places, the same rate has occurred several times. (1.53% even occurred three times.) This is the second time the semi-annual inflation rate has repeated in the next 6-month period. The other was 0.86% announced Nov 1998 and again May 1999.

Code: Select all

Announced   Month   Rate
---------   -----   ----
05-01-2009         -2.78%
05-01-2002          0.28%
11-01-2010   Nov    0.37%
05-01-2006          0.50%
11-01-2003   Nov    0.54%
05-01-2013          0.59%  <-- dup
11-01-2013   Nov    0.59%  <-- dup
09-01-1998          0.62%
05-01-2010          0.77%
11-01-1998   Nov    0.86%  <-- dup
05-01-1999          0.86%  <-- dup
11-01-2012   Nov    0.88%
05-01-2012          1.10%
11-01-2001   Nov    1.19%  <-- dup
05-01-2004          1.19%  <-- dup
05-01-2007          1.21%
11-01-2002   Nov    1.23%
11-01-2004   Nov    1.33%
05-01-2001          1.44%
11-01-2000   Nov    1.52%
11-01-2007   Nov    1.53%  <-- dup
11-01-2009   Nov    1.53%  <-- dup
11-01-2011   Nov    1.53%  <-- dup
11-01-2006   Nov    1.55%
11-01-1999   Nov    1.76%
05-01-2003          1.77%
05-01-2005          1.79%
05-01-2000          1.91%
05-01-2011          2.30%
05-01-2008          2.42%
11-01-2008   Nov    2.46%
11-01-2005   Nov    2.85%
Source: TreasuryDirect Past I Bond Rates

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