IBonds - now or wait? [November 2017 rate]

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notmyhand
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IBonds - now or wait? [November 2017 rate]

Post by notmyhand » Tue Sep 05, 2017 7:30 am

[Thread updated for November, see below. --admin LadyGeek]

I looked through the search results but I didn't see anything recent -

I have the cash now to buy our allocation of IBonds for the year. Do you think I should do it now or wait until the next reset which is in October, correct?

Thank you!

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BL
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Re: IBonds - now or wait?

Post by BL » Tue Sep 05, 2017 7:37 am

It changes November 1.

You can get CPI info in October which determines the 6-month variable part and can help you make the decision whether to buy before November or wait. You won't know until November 1 what the fixed value will be. That has been zero or very low for several years.

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Re: IBonds - now or wait?

Post by notmyhand » Tue Sep 05, 2017 7:55 am

Perfect. So it sounds like I should wait until October 1st to see the CPI information and then I can make a better decision. Thank you!

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Re: IBonds - now or wait?

Post by beardsworth » Tue Sep 05, 2017 8:05 am

The CPI-U for September, the last "puzzle piece" in the new I Bond inflation component rate which takes effect on November 1, will be announced on the morning of October 13. Here on Bogleheads, someone nearly always starts a new thread explaining what it means for I Bonds.

https://www.bls.gov/schedule/news_release/cpi.htm

And you can always view what CPI-U has been doing in recent months here:

https://www.bls.gov/news.release/cpi.nr0.htm

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TD2626
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Re: IBonds - now or wait?

Post by TD2626 » Tue Sep 05, 2017 8:15 am

BL wrote:
Tue Sep 05, 2017 7:37 am
You won't know until November 1 what the fixed value will be. That has been zero or very low for several years.
One question is whether the fixed value being zero or negligible (effectively zero, almost) will actually matter. It would be nice if the fixed component was non negligible but as far as I see it any value (expense ratio, the interest on my checking account, etc) that is less than 0.1% is so close to negligible that it is effectively zero. Of course, over 30 years, it can add up, though.

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Re: IBonds - now or wait?

Post by welderwannabe » Tue Sep 05, 2017 9:21 am

Its a tough call. CPI has been lower the last 3-4 months, so if that continues chances are the inflation component of the I-Bonds may drop. If you buy the bonds in October I think you will still get 6 months of the current inflation component. If you wait until November, you will get the new rate...which if I had a dollar to bet right now I would bet on the inflation component dropping.

The fixed rate is anyone's guess, and I have no idea what makes the Treasury decide to change the fixed rate or not. It seems very proprietary. The 10 year has been going in the wrong direction since May for me to have any hope of a fixed rate increase.


I bought half of my I-Bond allocation a few months ago. Right now I am planning on waiting until November to buy the rest, but if the September CPI (released in October) looks bad I may pull the trigger early.


Best of luck! It seems that Bogleheads are against market timing, except for those of us who like iBonds!
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

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Re: IBonds - now or wait?

Post by #Cruncher » Tue Sep 05, 2017 1:06 pm

BL wrote:
Tue Sep 05, 2017 7:37 am
You can get CPI info in October which determines the 6-month variable part and can help you make the decision whether to buy before November or wait.
Every six months a thread like this one appears where the original poster asks if he should buy I Bonds before or after the next six-month rate change (May 1st and November 1st). And in almost all of them a response like yours appears, BL. And they are all wrong! Knowing what inflation rate will be announced does not help one decide whether to buy before or after November 1st.

The reason it doesn't help is that whatever that rate is, it will be applied to both purchases made before and after November 1st. The only difference is when. If one buys in November, one will get that inflation rate applied immediately for the six months November 2017 - April 2018. If one buys in October one will get that same inflation rate applied for six months April 2018 - September 2018.

In some cases knowing the current semi-annual inflation rate can help one decide when to buy. This is because it will be applied only to purchases made before the reset. If it were unusually high, say 2% or more, one should buy before the reset. But the current semi-annul rate is only 0.98%. (See TreasuryDirect's What have rates been in the past?.) This is OK but not unusually high. In fact it is almost exactly in line with the presumed 2% annual inflation target of the Federal Reserve.

If you are determined to buy more I Bonds in 2017, my suggestion is to do it after November 1st. The fixed rate is currently 0%. The new one will not be lower and may be higher. If you are unsure whether to buy more in 2017, I suggest making your decision after knowing the new fixed and semi-annual inflation rates. If they are too low, you may decide to just forgo any more purchases in 2017.

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Re: IBonds - now or wait?

Post by flamesabers » Tue Sep 05, 2017 2:23 pm

OP,

You could always hedge your bets with this issue: buy $5k before November 1st and buy another $5k after November 1st.

For simplicity sake, I would suggest buying $10k now so that you're done with I-Bonds for the year. If the fixed-rate of I-Bonds happen to spike in November, you can always buy $10k of them in January of next year. I'm very doubtful the fixed rate will change much if at all in November. It's been close to ten years since the fixed rate was above 1%.

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Re: IBonds - now or wait?

Post by VictoriaF » Tue Sep 05, 2017 3:54 pm

flamesabers wrote:
Tue Sep 05, 2017 2:23 pm
You could always hedge your bets with this issue: buy $5k before November 1st and buy another $5k after November 1st.
The bets would not be hedged in 2017. I bonds purchased now are certain to have 0% fixed rate. In November there is a chance for 0.1% or better.

If the November rate is 0.1%, then one has to decide when to buy I bonds in 2018, and hedging bets may be appropriate.

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Re: IBonds - now or wait?

Post by flamesabers » Tue Sep 05, 2017 4:03 pm

VictoriaF wrote:
Tue Sep 05, 2017 3:54 pm
flamesabers wrote:
Tue Sep 05, 2017 2:23 pm
You could always hedge your bets with this issue: buy $5k before November 1st and buy another $5k after November 1st.
The bets would not be hedged in 2017. I bonds purchased now are certain to have 0% fixed rate. In November there is a chance for 0.1% or better.

If the November rate is 0.1%, then one has to decide when to buy I bonds in 2018, and hedging bets may be appropriate.

Victoria
I was talking about the variable rate. If the fixed rate stays at 0% in November and the variable rate declines, clearly it would have been a better deal to buy before November then after.

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Re: IBonds - now or wait?

Post by Grt2bOutdoors » Tue Sep 05, 2017 4:21 pm

Buy if you want the insurance against future inflation. Don't buy because you are betting on a change in the fixed rate portion of the bond, IMO that will remain a zero if only because the I bond offers downside protection against threat of deflation. A TIP's principal value can decline in times of deflation, an I bond's value can never decline below previously accrued value. If the calculated inflationary adjustment becomes negative, the rate paid on the current issue of the I bond will be 0%. That feature should be worth something and IMO the US Treasury recognizes this, the cost is the fixed rate of 0%.
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Re: IBonds - now or wait?

Post by DaftInvestor » Tue Sep 05, 2017 5:31 pm

Are you planning on holding these LONG term? If yes - you are better off waiting until November to see if the fixed rate will be non-zero.

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Re: IBonds - now or wait?

Post by kiddoc » Tue Sep 05, 2017 7:13 pm

OP, sorry to deviate but what are you looking to accomplish with I-bonds? I used to buy I-bonds regularly for long term inflation protection. Recently, I have reconsidered. I am not sure I-bonds are a good long term proposition unless the fixed rate goes up substantially or inflation runs amok. I ran the numbers a few months ago. You are guaranteed to lose out to inflation after taxes at low fixed rates. A 30 year TIPS with a 1% coupon held in a taxable account was much better than an I-bond with 0.1% fixed rate when held to maturity. Now, I am using I-bonds as short to intermediate term vehicle to hold funds that would otherwise be in savings acct/ CDs for 1-5 years. Just my 2 cents.

This year, I am planning to buy TIPS at Fidelity and hold them to maturity. I am hoping Fidelity's record keeping will make tax filing easy.
"The four most dangerous words in investing are: 'this time it's different.'" - Sir John Templeton

BigDaddyRich
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Re: IBonds - now or wait?

Post by BigDaddyRich » Tue Sep 05, 2017 10:40 pm

For independent analysis and guidance on buying I-Bonds, follow Tipswatch (aka David Enna) here: https://seekingalpha.com/author/tipswat ... r_articles

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Re: IBonds - now or wait?

Post by beardsworth » Fri Oct 13, 2017 8:01 am

The September CPI-U was released this morning.

https://www.bls.gov/schedule/news_release/cpi.htm

Can any of the resident experts calculate what it means for the inflation-based component of I Bonds to be issued during the six months beginning November 1?

Thanks.

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November 2017 - New I bond rate?

Post by Grt2bOutdoors » Fri Oct 13, 2017 8:07 am

Can anyone post what the new six month variable rate will be for the Series I savings bond come November 1, 2017?
Does it pay to purchase in October or wait until November? Thanks.....
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Re: IBonds - now or wait?

Post by dh » Fri Oct 13, 2017 8:08 am

beardsworth wrote:
Fri Oct 13, 2017 8:01 am
The September CPI-U was released this morning.

https://www.bls.gov/schedule/news_release/cpi.htm

Can any of the resident experts calculate what it means for the inflation-based component of I Bonds to be issued during the six months beginning November 1?

Thanks.
March: 243.801
September: 246.819
(September '17 CPI-U - March '17 CPI U / March '17 CPI U) = 1.24%
So, if the fixed rate remains at 0% on November 1 the composite rate will be 2.48%

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Re: IBonds - now or wait?

Post by z3r0c00l » Fri Oct 13, 2017 8:40 am

flamesabers wrote:
Tue Sep 05, 2017 2:23 pm
For simplicity sake, I would suggest buying $10k now so that you're done with I-Bonds for the year.
Just a reminder to wait until the end of the month (or a few days before the end of the month to be safe) since you will get the full month's interest on the I-bond and can keep the money in a bank account also accruing interest during the first few weeks of the month. "Now" meaning two weeks from now in this case.

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Re: IBonds - now or wait?

Post by Spirit Rider » Fri Oct 13, 2017 10:25 am

z3r0c00l wrote:
Fri Oct 13, 2017 8:40 am
flamesabers wrote:
Tue Sep 05, 2017 2:23 pm
For simplicity sake, I would suggest buying $10k now so that you're done with I-Bonds for the year.
Just a reminder to wait until the end of the month (or a few days before the end of the month to be safe) since you will get the full month's interest on the I-bond and can keep the money in a bank account also accruing interest during the first few weeks of the month. "Now" meaning two weeks from now in this case.
Hardly worth it. At today's interest rates and the $10K limit, two weeks will only save you $5 or less. Now when the interest rates were 5%+ and the limit was $30K or even $60K, it was 15 - 30 times that amount.

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Re: IBonds - now or wait?

Post by z3r0c00l » Fri Oct 13, 2017 12:25 pm

Spirit Rider wrote:
Fri Oct 13, 2017 10:25 am
z3r0c00l wrote:
Fri Oct 13, 2017 8:40 am
flamesabers wrote:
Tue Sep 05, 2017 2:23 pm
For simplicity sake, I would suggest buying $10k now so that you're done with I-Bonds for the year.
Just a reminder to wait until the end of the month (or a few days before the end of the month to be safe) since you will get the full month's interest on the I-bond and can keep the money in a bank account also accruing interest during the first few weeks of the month. "Now" meaning two weeks from now in this case.
Hardly worth it. At today's interest rates and the $10K limit, two weeks will only save you $5 or less. Now when the interest rates were 5%+ and the limit was $30K or even $60K, it was 15 - 30 times that amount.
The full month is worth $10 in a good online bank account! :shock:

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Re: IBonds - now or wait?

Post by John151 » Fri Oct 13, 2017 9:21 pm

dh wrote:
Fri Oct 13, 2017 8:08 am
beardsworth wrote:
Fri Oct 13, 2017 8:01 am
The September CPI-U was released this morning.

https://www.bls.gov/schedule/news_release/cpi.htm

Can any of the resident experts calculate what it means for the inflation-based component of I Bonds to be issued during the six months beginning November 1?

Thanks.
March: 243.801
September: 246.819
(September '17 CPI-U - March '17 CPI U / March '17 CPI U) = 1.24%
So, if the fixed rate remains at 0% on November 1 the composite rate will be 2.48%
If this interest rate projection is accurate, I Bonds look attractive, even with a fixed rate of zero. I stopped buying I Bonds when the fixed rate dropped below one percent. But with general interest rates as low as they are right now, and with I-Bonds offering 2.48% on a super-safe investment with some inflation protection and tax-deferred income, I may buy some I bonds this year and next year too.

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Re: IBonds - now or wait?

Post by JBTX » Fri Oct 13, 2017 10:26 pm

#Cruncher wrote:
Tue Sep 05, 2017 1:06 pm
BL wrote:
Tue Sep 05, 2017 7:37 am
You can get CPI info in October which determines the 6-month variable part and can help you make the decision whether to buy before November or wait.
Every six months a thread like this one appears where the original poster asks if he should buy I Bonds before or after the next six-month rate change (May 1st and November 1st). And in almost all of them a response like yours appears, BL. And they are all wrong! Knowing what inflation rate will be announced does not help one decide whether to buy before or after November 1st.

The reason it doesn't help is that whatever that rate is, it will be applied to both purchases made before and after November 1st. The only difference is when. If one buys in November, one will get that inflation rate applied immediately for the six months November 2017 - April 2018. If one buys in October one will get that same inflation rate applied for six months April 2018 - September 2018.

In some cases knowing the current semi-annual inflation rate can help one decide when to buy. This is because it will be applied only to purchases made before the reset. If it were unusually high, say 2% or more, one should buy before the reset. But the current semi-annul rate is only 0.98%. (See TreasuryDirect's What have rates been in the past?.) This is OK but not unusually high. In fact it is almost exactly in line with the presumed 2% annual inflation target of the Federal Reserve.

If you are determined to buy more I Bonds in 2017, my suggestion is to do it after November 1st. The fixed rate is currently 0%. The new one will not be lower and may be higher. If you are unsure whether to buy more in 2017, I suggest making your decision after knowing the new fixed and semi-annual inflation rates. If they are too low, you may decide to just forgo any more purchases in 2017.
This. The only really relevant thing is the fixed rate. Not likely to change, but it could.

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Re: November 2017 - New I bond rate?

Post by bhtomj » Fri Oct 13, 2017 11:40 pm


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Re: November 2017 - New I bond rate?

Post by JBTX » Fri Oct 13, 2017 11:55 pm

You may find this thread helpful.

viewtopic.php?f=1&t=227070

Bottom line, the only thing that really matters in your decision is the fixed rate. The inflation rate will be the same for new ibonds and existing ibonds come November. For existing Ibonds the "fixed rate" is zero, and has been for a long time. it will likely remain zero, but could go up slightly to something like 0.25%. So I would probably wait until the November fixed rate is announced,

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Re: November 2017 - New I bond rate?

Post by welderwannabe » Sat Oct 14, 2017 6:46 am

The inflation rate will be the same for new ibonds and existing ibonds come November.
Maybe I am missing something (and I probably am), but how do you know the semi-annual inflation rate isn't changing in November? If they change the rate in November, and you buy a bond that is issued in November, I believe you get the new fixed and semi-annual inflation rates. If you buy a bond that is issued in October then you get the previous rates for 6 months and won't receive the rates that they determine in November until April.

If the fixed rate remains unchanged and the inflation rate goes down then buying in October was the right call.

Myself, I am waiting until November to see where he fixed rate is at. I am holding out hope (not big hope) that they raise the fixed rate to .10%
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Re: November 2017 - New I bond rate?

Post by #Cruncher » Sat Oct 14, 2017 8:41 am

welderwannabe wrote:
Sat Oct 14, 2017 6:46 am
[If] you buy a bond that is issued in November, I believe you get the new fixed and semi-annual inflation rates. If you buy a bond that is issued in October then you get the previous rates for 6 months and won't receive the rates that they determine in November until April.
The first sentence is correct; but the second one is only half-correct, WW. If you buy in October you'll get the composite of the 0% fixed rate and 0.98% semi-annual inflation rate for the first six months. The next six months you'll get the composite of the 0% fixed rate and the new semi-annual inflation rate -- which we know will be 1.24% (see this post by dh). In subsequent six month periods you'll get the composite of the 0% fixed rate and whatever is the most recent semi-annual inflation rate. Your composite will always be based on the 0% fixed rate. It will never be based on the new fixed rate to be announced November 1st should that happen to be more than 0%.
welderwannabe in same post wrote:If the fixed rate remains unchanged and the inflation rate goes down then buying in October was the right call.
This is wrong. The new inflation rate is irrelevant because it will be applied to both an October and November purchase. The following table compares purchases of $10,000 I Bonds in October and November under the following assumptions:
  • Each I Bond is held for five years or ten 6-month periods.
  • The fixed rate announced November 1st remains at 0%.
  • The next eight semi-annual inflation rates are all 2.0%.
  • The last semi-annual inflatrion rate is 0.98% -- the same as the current one.
  • No rounding. (The actual computation method rounds each $25 I Bond increment to the nearest penny every six months -- see this Wiki section.)

Code: Select all

      --- Rate ---    ------ Value -------
6mo    Oct    Nov        Oct        Nov
---   -----  -----    ---------  ---------
  1  [0.98%] 1.24%    10,098.00  10,124.00
  2   1.24%  2.00%    10,223.22  10,326.48
  3   2.00%  2.00%    10,427.68  10,533.01
  4   2.00%  2.00%    10,636.23  10,743.67
  5   2.00%  2.00%    10,848.96  10,958.54
  6   2.00%  2.00%    11,065.94  11,177.71
  7   2.00%  2.00%    11,287.26  11,401.27
  8   2.00%  2.00%    11,513.00  11,629.29
  9   2.00%  2.00%    11,743.26  11,861.88
 10   2.00% [0.98%]   11,978.13  11,978.13
Note how the semi-annual inflation rates applied to the November purchase for periods 1 to 9 are all applied to the October purchase for periods 2 to 10. So they do not affect the relative values of the two purchases after five years. The only thing that determines their relative values after five years is the current and final semi-annual inflation rates. Since they were assumed to be the same, the final values are also the same.

Here is the same comparison if the new semi-annual inflation rate were 0% instead of 1.24%. Note that both purchases still have the same value after five years.

Code: Select all

      --- Rate ---    ------ Value -------
6mo    Oct    Nov        Oct        Nov
---   -----  -----    ---------  ---------
  1  [0.98%] 0.00%    10,098.00  10,000.00
  2   0.00%  2.00%    10,098.00  10,200.00
  3   2.00%  2.00%    10,299.96  10,404.00
  4   2.00%  2.00%    10,505.96  10,612.08
  5   2.00%  2.00%    10,716.08  10,824.32
  6   2.00%  2.00%    10,930.40  11,040.81
  7   2.00%  2.00%    11,149.01  11,261.62
  8   2.00%  2.00%    11,371.99  11,486.86
  9   2.00%  2.00%    11,599.43  11,716.59
 10   2.00% [0.98%]   11,831.42  11,831.42

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Re: IBonds - now or wait?

Post by LadyGeek » Sat Oct 14, 2017 9:05 am

I merged Grt2bOutdoors' thread into here. The combined thread is now in the Investing - Theory, News & General forum (general discussion).
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Re: November 2017 - New I bond rate?

Post by welderwannabe » Sat Oct 14, 2017 9:48 am

#Cruncher wrote:
Sat Oct 14, 2017 8:41 am
The first sentence is correct; but the second one is only half-correct, WW. If you buy in October you'll get the composite of the 0% fixed rate and 0.98% semi-annual inflation rate for the first six months. The next six months you'll get the composite of the 0% fixed rate and the new semi-annual inflation rate -- which we know will be 1.24% (see this post by dh). In subsequent six month periods you'll get the composite of the 0% fixed rate and whatever is the most recent semi-annual inflation rate. Your composite will always be based on the 0% fixed rate. It will never be based on the new fixed rate to be announced November 1st should that happen to be more than 0%.
Yes, I am aware the fixed rate wont change once you purchase the bond. My reference to rate changes was only in relation to the inflation rate and not the fixed rate. Otherwise it wouldn't be a 'fixed' rate :)

So I am clear, you are stating that the 6 month inflation rate for a bond issued in November will not be the rate that was announced on Nov 1st, but the rate that was announced the previous May? It would get whatever the new fixed rate was, but would use the inflation rate announced from May? A December issue date bond will get the new inflation rate, but a November issue date bond won't see it for another 6 months? If so only the government can make things this confusing.

Also, regarding DH's post that you referred me to, I was under the understanding that while the inflation rate was based on CPI, it has some magic government pixie dust sprinkled in and you never knew for sure what the new inflation rate would be for sure until they announced it. Am I to also understand that it is basically cast in stone that it is based exactly on the CPI rate as DH calculated or is his post just a good estimate?
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

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Re: November 2017 - New I bond rate?

Post by vtMaps » Sat Oct 14, 2017 11:54 am

welderwannabe wrote:
Sat Oct 14, 2017 9:48 am
Am I to also understand that it is basically cast in stone that it is based exactly on the CPI rate as DH calculated
Yes.

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Re: November 2017 - New I bond rate?

Post by #Cruncher » Sat Oct 14, 2017 12:39 pm

welderwannabe wrote:
Sat Oct 14, 2017 9:48 am
Yes, I am aware the fixed rate wont change once you purchase the bond. My reference to rate changes was only in relation to the inflation rate and not the fixed rate.
Sorry about that. I was going by your use of the plural "rates" in "If you buy a bond that is issued in October then you ... won't receive the rates that they determine in November until April."
welderwannabe in same post wrote:So I am clear, you are stating that the 6 month inflation rate for a bond issued in November will not be the rate that was announced on Nov 1st, but the rate that was announced the previous May?
That's not what I stated. The composite rate for I Bonds bought in November will be based on the 1.24% semi-annual inflation rate to be officially announced November 1st, not on the 0.98% one announced last May.
welderwannabe in same post wrote:...I was under the understanding that while the inflation rate was based on CPI, it has some magic government pixie dust sprinkled in and you never knew for sure what the new inflation rate would be for sure until they announced it.
No pixie dust is involved. It's a straight calculation as dh laid out. From TreasuryDirect's FAQ, How is the earnings [aka composite] rate of an I bond determined?:
The earnings rate combines two separate rates:
  • A fixed rate of return, which remains the same throughout the life of the I bond.
  • A variable semiannual inflation rate based on changes in the Consumer Price Index for all Urban Consumers (CPI-U). The Bureau of the Fiscal Service announces the rates each May and November. The semiannual inflation rate announced in May IS the change between the CPI-U figures from the preceding September and March; the inflation rate announced in November IS the change between the CPI-U figures from the preceding March and September.

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Re: November 2017 - New I bond rate?

Post by welderwannabe » Sat Oct 14, 2017 12:53 pm

#Cruncher wrote:
Sat Oct 14, 2017 12:39 pm
That's not what I stated. The composite rate for I Bonds bought in November will be based on the 1.24% semi-annual inflation rate to be officially announced November 1st, not on the 0.98% one announced last May.
Good, so I don't have a misunderstanding then. Had the inflation rate gone down in November (instead of up as it appears that it would) someone would have been better off buying in October as they would have 6 months of the previously higher inflation rate ASSUMING the fixed rate holds. However, since it looks like the inflation rate is actually increasing then waiting until November would be the best plan, especially considering the fixed rate is currently zero and can't get any worse. Please let me know if I have it wrong here.
#Cruncher wrote:
Sat Oct 14, 2017 12:39 pm
No pixie dust is involved. It's a straight calculation as dh laid out.
Thanks for the clarification. I had assumed it was based on some internal analysis of the CPI and some bureaucrat makes up a number. I had no idea it was that cut and dry. That is good to know.

EE bond rates used to match 90% of the average yield of 5-year treasuries for the preceding 6 months. Now they determine it by looking at yields and adjust them for various factors, such as the early redemption features, and
other fuzzy things I will generically refer to as pixie dust. Since 90% of the 5 year treasury rate is around 1.7% right now and EE bonds get around .1% fixed rate, that gives the pixie dust factor a value of -1.6%.

I just assumed (incorrectly) that they were doing the same type of things with the inflation rate on the I bonds now too!

Thanks again for clarifying. I will definitely wait until November for my purchase and see where the fixed rate ends up.
I am not an investment professional, but I did stay at a Holiday Inn Express last night.

LK2012
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New I Bond Variable Rate for November 2017 - 2.48%

Post by LK2012 » Sun Oct 15, 2017 3:11 pm

[Thread merged into here, see below. --admin LadyGeek]

According to seekingalpha.com Tipswatch, the New I Bond Variable Rate for November 2017 will be 2.48%.

https://seekingalpha.com/article/411337 ... 48-percent

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John151
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Re: New I Bond Variable Rate for November 2017 - 2.48%

Post by John151 » Mon Oct 16, 2017 3:08 pm

Good to know, LK2012. Thank you for posting this.

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Re: New I Bond Variable Rate for November 2017 - 2.48%

Post by oldcomputerguy » Mon Oct 16, 2017 3:19 pm

Any word yet on what the fixed portion will be?
Anybody know why there's a 20-pound frozen turkey up in the light grid?

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Re: New I Bond Variable Rate for November 2017 - 2.48%

Post by Chuck » Mon Oct 16, 2017 3:22 pm

The fixed rate is never known until the rate change announcement on November 1st.

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Re: New I Bond Variable Rate for November 2017 - 2.48%

Post by HueyLD » Mon Oct 16, 2017 3:33 pm

My guess is that the fixed rate will be zero.

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Re: New I Bond Variable Rate for November 2017 - 2.48%

Post by Ice-9 » Mon Oct 16, 2017 3:43 pm

For those trying to sneak this in as a sort of 11-month-and-a-couple-days CD, mymoneyblog.com has calculated the effective return after losing the three-month interest penalty would be 1.76%. This beats most 1-yr CDs currently available, so it's a reasonable option right now with no state tax on the interest.

http://www.mymoneyblog.com/savings-i-bo ... -rate.html

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Re: New I Bond Variable Rate for November 2017 - 2.48%

Post by JBTX » Mon Oct 16, 2017 4:19 pm

While I haven't studied that data, I would tend to think higher than normal ibond inflation rates are typically followed by lower than normal inflation rates, as certain sectors in CPI-U can cause a temporary spike (energy, food, etc) but inevitably those tend to reverse before too long.

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Re: New I Bond Variable Rate for November 2017 - 2.48%

Post by oldcomputerguy » Mon Oct 16, 2017 4:51 pm

HueyLD wrote:
Mon Oct 16, 2017 3:33 pm
My guess is that the fixed rate will be zero.
Yeah, that's my guess too, but as I've said before, I have been known to be wrong. :?
Anybody know why there's a 20-pound frozen turkey up in the light grid?

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Re: IBonds - now or wait?

Post by LadyGeek » Mon Oct 16, 2017 7:33 pm

I merged LK2012's thread into the on-going discussion.
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Re: IBonds - now or wait? [November 2017 rate]

Post by LadyGeek » Wed Nov 01, 2017 3:47 pm

FYI - The November rate announcement is out. See: I Bond fixed rate 0.10% [November rate announced]

I moved several posts related to the announcement in the new thread. Please continue the discussion there.

(Thread locked.)
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