I Bond’s Variable Rate Will Fall To 2.22% On May 1

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Topic Author
BogleMelon
Posts: 3181
Joined: Mon Feb 01, 2016 10:49 am

I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by BogleMelon »

The variable rate on U.S. Series I Savings Bonds will fall from 2.48% to 2.22% for I Bonds purchased after May 1, based on the March inflation numbers just released by the U.S. Bureau of Labor Statistics.
https://tipswatch.com/2018/04/11/i-bond ... -on-may-1/
What this means for TIPS
Non-seasonally adjusted inflation is used to adjust the principal balances of Treasury Inflation-Protected Securities. Today's report means that those balances will fall 0.1% in May (but will have increased 2.4% over a year). Here are the new May inflation indexes for all TIPS.

The Treasury will auction a new 5-year TIPS on Thursday, April 19. At this point, the real yield is trending above 0.60%, which is very attractive -- 50 basis points higher than the I Bond's current real return.
Full analysis:
https://seekingalpha.com/article/416234 ... block=true

Anyone maximized or will maximize his purchase amount for 2018?
Last edited by BogleMelon on Wed Apr 11, 2018 8:50 am, edited 2 times in total.
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather
User avatar
indexfundfan
Posts: 3962
Joined: Tue Feb 20, 2007 10:21 am
Contact:

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by indexfundfan »

I plan to maximize. This gave me pause whether to buy in April or wait for a possible increase in the fixed rate.
My signature has been deleted.
Chuck
Posts: 2505
Joined: Thu May 21, 2009 12:19 pm

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by Chuck »

2.22 is the new 0.
User avatar
Clever_Username
Posts: 1915
Joined: Sun Jul 15, 2012 12:24 am
Location: Southern California

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by Clever_Username »

I'm going to maximize, and I'm going to maximize in either April or May, unless there is any reason I should wait for November? I suppose I could buy a 6-month treasury (bill? note? I forget the difference) with these funds and wait for November.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_ | | I survived my first downturn and all I got was this signature line.
jeffreyalan
Posts: 37
Joined: Mon Mar 19, 2018 9:52 am

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by jeffreyalan »

I am now in a position to start accumulating a good chunk of my monthly income and put it away. Do those of you who buy I bonds feel comfortable with the safety of the Treasury Direct website? Given that they do not provide monthly statements etc.

Thanks!

Jeffrey
User avatar
Clever_Username
Posts: 1915
Joined: Sun Jul 15, 2012 12:24 am
Location: Southern California

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by Clever_Username »

jeffreyalan wrote: Wed Apr 11, 2018 10:41 am I am now in a position to start accumulating a good chunk of my monthly income and put it away. Do those of you who buy I bonds feel comfortable with the safety of the Treasury Direct website? Given that they do not provide monthly statements etc.
I don't have a problem with the Treasury Direct website, other than the interface kinda sucks, but I go there so rarely it doesn't really bother me.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_ | | I survived my first downturn and all I got was this signature line.
User avatar
Darth Xanadu
Posts: 1108
Joined: Sat Jan 27, 2018 12:47 am
Location: MA

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by Darth Xanadu »

Clever_Username wrote: Wed Apr 11, 2018 10:28 am I'm going to maximize, and I'm going to maximize in either April or May, unless there is any reason I should wait for November? I suppose I could buy a 6-month treasury (bill? note? I forget the difference) with these funds and wait for November.
I will max this year, my first year of I-Bond purchase. I am waiting until later this year (not necessarily due to timing of rate announcements, only because my cash flow will jump up after 401k maxes out in June). So I'll probably buy end of July or end of August.
Amphian
Posts: 154
Joined: Tue Jan 30, 2018 8:37 pm

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by Amphian »

Clever_Username wrote: Wed Apr 11, 2018 10:28 am I'm going to maximize, and I'm going to maximize in either April or May, unless there is any reason I should wait for November? I suppose I could buy a 6-month treasury (bill? note? I forget the difference) with these funds and wait for November.
I'm considering when to buy as well (also my first I Bond purchase) and looking at one of those bank offers where they give you $300 - $400 bonus to open a savings account with $10K - $15K and hold the account for 3 - 6 months. If I'm doing the math on the bonus correctly, that's around 6% for that timeframe and lets me see if the fixed rate portion of the I Bond rises in May and November, while holding the money I need for the purchase. The downside is the year long no withdrawal and five year interest penalty timers don't start until you buy the I Bond, but I plan to hold these long term, and, like Darth Xanadu, I will have better cash flow later in the year after my 401K maxes. If I had to blow the bonus deal to get the money in, say July, I could do it, unlike the I Bond.
Hillview
Posts: 524
Joined: Fri Feb 02, 2018 6:27 am

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by Hillview »

Thanks -- just got our first IBonds!
Regressor
Posts: 74
Joined: Tue Nov 07, 2017 8:28 am

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by Regressor »

Is there any advantage to waiting till May first to buy the 10k worth of I bonds as opposed to buying now?
User avatar
indexfundfan
Posts: 3962
Joined: Tue Feb 20, 2007 10:21 am
Contact:

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by indexfundfan »

Regressor wrote: Wed Apr 11, 2018 12:23 pm Is there any advantage to waiting till May first to buy the 10k worth of I bonds as opposed to buying now?
The fixed rate, which is fixed for the duration (30-yr) of the bond, could be raised.
My signature has been deleted.
User avatar
gmaynardkrebs
Posts: 2339
Joined: Sun Feb 10, 2008 10:48 am

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by gmaynardkrebs »

jeffreyalan wrote: Wed Apr 11, 2018 10:41 am I am now in a position to start accumulating a good chunk of my monthly income and put it away. Do those of you who buy I bonds feel comfortable with the safety of the Treasury Direct website? Given that they do not provide monthly statements etc.

Thanks!

Jeffrey
I despise Treasury Direct, and have passed on I-Bonds, just for that reason. I hold my Treasuries at Vanguard -- unfortunately, I-bonds are TD only. I am concerned that my heirs will have difficulty getting the money out through that incredibly obtuse interface, and useless customer service dept.
Amphian
Posts: 154
Joined: Tue Jan 30, 2018 8:37 pm

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by Amphian »

gmaynardkrebs wrote: Wed Apr 11, 2018 12:33 pm I despise Treasury Direct, and have passed on I-Bonds, just for that reason. I hold my Treasuries at Vanguard -- unfortunately, I-bonds are TD only. I am concerned that my heirs will have difficulty getting the money out through that incredibly obtuse interface, and useless customer service dept.
Yeah, the product interests me, but what I have heard about customer service worries me. I wish you could buy and hold them somewhere else.
User avatar
Darth Xanadu
Posts: 1108
Joined: Sat Jan 27, 2018 12:47 am
Location: MA

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by Darth Xanadu »

gmaynardkrebs wrote: Wed Apr 11, 2018 12:33 pm
jeffreyalan wrote: Wed Apr 11, 2018 10:41 am I am now in a position to start accumulating a good chunk of my monthly income and put it away. Do those of you who buy I bonds feel comfortable with the safety of the Treasury Direct website? Given that they do not provide monthly statements etc.

Thanks!

Jeffrey
I despise Treasury Direct, and have passed on I-Bonds, just for that reason. I hold my Treasuries at Vanguard -- unfortunately, I-bonds are TD only. I am concerned that my heirs will have difficulty getting the money out through that incredibly obtuse interface, and useless customer service dept.
I've read many, many threads on this topic here at BH. I'll just say this: My hope is that in 40-50 years, if I'm fortunate to live a long life, and my heirs are dealing with my estate, the TD interface is unlikely to look and operate as it does now. So, my view is if you are interested in I Bonds as an investment vehicle for whatever reason, I wouldn't let something as silly as poor user experience stand in the way. After all, the design and/or process can change at any time, but you can't ever go back and buy I Bonds for years that have passed.
User avatar
gmaynardkrebs
Posts: 2339
Joined: Sun Feb 10, 2008 10:48 am

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by gmaynardkrebs »

Darth Xanadu wrote: Wed Apr 11, 2018 12:53 pm
I've read many, many threads on this topic here at BH. I'll just say this: My hope is that in 40-50 years, if I'm fortunate to live a long life, and my heirs are dealing with my estate, the TD interface is unlikely to look and operate as it does now. So, my view is if you are interested in I Bonds as an investment vehicle for whatever reason, I wouldn't let something as silly as poor user experience stand in the way. After all, the design and/or process can change at any time, but you can't ever go back and buy I Bonds for years that have passed.
True, buy you can buy TIPS via Vanguard, which are a mighty close substitute, and never have to think of TD again.
User avatar
indexfundfan
Posts: 3962
Joined: Tue Feb 20, 2007 10:21 am
Contact:

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by indexfundfan »

gmaynardkrebs wrote: Wed Apr 11, 2018 1:38 pm
Darth Xanadu wrote: Wed Apr 11, 2018 12:53 pm
I've read many, many threads on this topic here at BH. I'll just say this: My hope is that in 40-50 years, if I'm fortunate to live a long life, and my heirs are dealing with my estate, the TD interface is unlikely to look and operate as it does now. So, my view is if you are interested in I Bonds as an investment vehicle for whatever reason, I wouldn't let something as silly as poor user experience stand in the way. After all, the design and/or process can change at any time, but you can't ever go back and buy I Bonds for years that have passed.
True, buy you can buy TIPS via Vanguard, which are a mighty close substitute, and never have to think of TD again.
I bonds let's you defer interest in the taxable account for as long as 30 years. This is important for people who wants to manage their MAGI.
My signature has been deleted.
Atgard
Posts: 557
Joined: Wed Apr 09, 2014 2:02 pm

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by Atgard »

I've never had an issue with the Treasury Direct website. It's not super-slick, and it takes a little getting used to, but you can say the same about Vanguard. At the end of the day, they both work and are the most efficient way for me to buy the low-cost investments I want.

Especially considering I really only need to use TD once a year to buy I-Bonds (and I usually log in just to check monthly, it's actually quite simple), I don't see what the big problem is.
Atgard
Posts: 557
Joined: Wed Apr 09, 2014 2:02 pm

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by Atgard »

As to the topic of the thread, I was planning to hold off until May in the hopes of a higher fixed rate. But it seems unlikely they will do more than MAYBE go from 0.1% to 0.2%... and they could keep it the same or even go back to 0.0%. So I'm tempted to just buy now and lock in 0.1% fixed + 2.48% for the first 6 months.
Topic Author
BogleMelon
Posts: 3181
Joined: Mon Feb 01, 2016 10:49 am

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by BogleMelon »

Atgard wrote: Wed Apr 11, 2018 1:47 pm (and I usually log in just to check monthly, it's actually quite simple),
You don't even have to log in to check monthly, they have a decent tool for that :wink: https://www.treasurydirect.gov/indiv/tools/sbwsetup.exe
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather
User avatar
Darth Xanadu
Posts: 1108
Joined: Sat Jan 27, 2018 12:47 am
Location: MA

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by Darth Xanadu »

Atgard wrote: Wed Apr 11, 2018 1:50 pm As to the topic of the thread, I was planning to hold off until May in the hopes of a higher fixed rate. But it seems unlikely they will do more than MAYBE go from 0.1% to 0.2%... and they could keep it the same or even go back to 0.0%. So I'm tempted to just buy now and lock in 0.1% fixed + 2.48% for the first 6 months.
My (limited) understanding of how it works is, you can buy on the last day of the month and get the interest for the full month. So no benefit to buying mid-month, and in fact can lose a few bucks earned in your savings account.
Whakamole
Posts: 1765
Joined: Wed Jan 13, 2016 8:59 pm

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by Whakamole »

BogleMelon wrote: Wed Apr 11, 2018 1:54 pm
Atgard wrote: Wed Apr 11, 2018 1:47 pm (and I usually log in just to check monthly, it's actually quite simple),
You don't even have to log in to check monthly, they have a decent tool for that :wink: https://www.treasurydirect.gov/indiv/tools/sbwsetup.exe
That tool won't get updated anymore starting soon: https://www.treasurydirect.gov/indiv/to ... wizard.htm
NOTE: The Savings Bond Wizard update for the November 1, 2017 savings bond rate release is the final update. As of the next savings bond rate release on May 1, 2018, the Savings Bond Wizard will no longer be available. However, at that time we'll provide instructions on our website on how to convert your Wizard files to the Savings Bond Calculator.
User avatar
indexfundfan
Posts: 3962
Joined: Tue Feb 20, 2007 10:21 am
Contact:

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by indexfundfan »

Darth Xanadu wrote: Wed Apr 11, 2018 2:20 pm
Atgard wrote: Wed Apr 11, 2018 1:50 pm As to the topic of the thread, I was planning to hold off until May in the hopes of a higher fixed rate. But it seems unlikely they will do more than MAYBE go from 0.1% to 0.2%... and they could keep it the same or even go back to 0.0%. So I'm tempted to just buy now and lock in 0.1% fixed + 2.48% for the first 6 months.
My (limited) understanding of how it works is, you can buy on the last day of the month and get the interest for the full month. So no benefit to buying mid-month, and in fact can lose a few bucks earned in your savings account.
Yes, but don't cut it too close. I would buy 2 or 3 business days before the last day of the month.
My signature has been deleted.
AnonJohn
Posts: 367
Joined: Wed Oct 07, 2015 2:45 pm

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by AnonJohn »

BogleMelon wrote: Wed Apr 11, 2018 1:54 pm
Atgard wrote: Wed Apr 11, 2018 1:47 pm (and I usually log in just to check monthly, it's actually quite simple),
You don't even have to log in to check monthly, they have a decent tool for that :wink: https://www.treasurydirect.gov/indiv/tools/sbwsetup.exe
And for the other linux fans here, it even works under linux, with WINE.
Atgard
Posts: 557
Joined: Wed Apr 09, 2014 2:02 pm

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by Atgard »

Darth Xanadu wrote: Wed Apr 11, 2018 2:20 pm
Atgard wrote: Wed Apr 11, 2018 1:50 pm As to the topic of the thread, I was planning to hold off until May in the hopes of a higher fixed rate. But it seems unlikely they will do more than MAYBE go from 0.1% to 0.2%... and they could keep it the same or even go back to 0.0%. So I'm tempted to just buy now and lock in 0.1% fixed + 2.48% for the first 6 months.
My (limited) understanding of how it works is, you can buy on the last day of the month and get the interest for the full month. So no benefit to buying mid-month, and in fact can lose a few bucks earned in your savings account.
Yes, thanks, I guess I should have specified by "now" I meant "April," a little before the end of the month. I believe you can even schedule it in advance now to purchase near the end of the month.
User avatar
gmaynardkrebs
Posts: 2339
Joined: Sun Feb 10, 2008 10:48 am

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by gmaynardkrebs »

indexfundfan wrote: Wed Apr 11, 2018 1:45 pm
gmaynardkrebs wrote: Wed Apr 11, 2018 1:38 pm
Darth Xanadu wrote: Wed Apr 11, 2018 12:53 pm
I've read many, many threads on this topic here at BH. I'll just say this: My hope is that in 40-50 years, if I'm fortunate to live a long life, and my heirs are dealing with my estate, the TD interface is unlikely to look and operate as it does now. So, my view is if you are interested in I Bonds as an investment vehicle for whatever reason, I wouldn't let something as silly as poor user experience stand in the way. After all, the design and/or process can change at any time, but you can't ever go back and buy I Bonds for years that have passed.
True, buy you can buy TIPS via Vanguard, which are a mighty close substitute, and never have to think of TD again.
I bonds let's you defer interest in the taxable account for as long as 30 years. This is important for people who wants to manage their MAGI.
Good point. All my TIPS are in retirement accounts, due to the tax issues.
User avatar
John151
Posts: 416
Joined: Fri Mar 02, 2007 5:03 pm

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by John151 »

On an investment of $10,000, changes in fixed rates and inflation rates are pretty negligible, so I buy the maximum in January and then forget about it.
Paul K
Posts: 38
Joined: Sat Apr 02, 2016 11:59 am

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by Paul K »

Why would the Treasury ever want to raise the fixed rate? Are they hoping to attract more investors and borrow at a lower rate than they could using traditional bonds?
User avatar
aj76er
Posts: 1179
Joined: Tue Dec 01, 2015 10:34 pm
Location: Austin, TX

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by aj76er »

John151 wrote: Wed Apr 11, 2018 5:28 pm On an investment of $10,000, changes in fixed rates and inflation rates are pretty negligible, so I buy the maximum in January and then forget about it.
+1
"Buy-and-hold, long-term, all-market-index strategies, implemented at rock-bottom cost, are the surest of all routes to the accumulation of wealth" - John C. Bogle
Amphian
Posts: 154
Joined: Tue Jan 30, 2018 8:37 pm

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by Amphian »

Paul K wrote: Wed Apr 11, 2018 9:50 pm Why would the Treasury ever want to raise the fixed rate? Are they hoping to attract more investors and borrow at a lower rate than they could using traditional bonds?
Why did they raise the fixed rate in November? (Granted, it was a tiny amount.)
User avatar
tipswatcher
Posts: 481
Joined: Tue Jun 21, 2011 5:17 pm
Location: North Carolina
Contact:

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by tipswatcher »

Non-seasonally adjusted inflation is used to adjust the principal balances of Treasury Inflation-Protected Securities. Today's report means that those balances will fall 0.1% in May
This was incorrect and I fixed it thanks to reader feedback, and I am sure that reader had to be a Boglehead. Smartest people on earth.

Correct wording: "Today's report means that those balances will rise 0.23% in May ..." I used the 'headline' number instead of the non-seasonally adjusted number. Dangers of working fast.
TIPS: Perfect investment for imperfect times?
User avatar
alpenglow
Posts: 1804
Joined: Tue May 31, 2011 12:02 pm

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by alpenglow »

Whakamole wrote: Wed Apr 11, 2018 2:24 pm
BogleMelon wrote: Wed Apr 11, 2018 1:54 pm
Atgard wrote: Wed Apr 11, 2018 1:47 pm (and I usually log in just to check monthly, it's actually quite simple),
You don't even have to log in to check monthly, they have a decent tool for that :wink: https://www.treasurydirect.gov/indiv/tools/sbwsetup.exe
That tool won't get updated anymore starting soon: https://www.treasurydirect.gov/indiv/to ... wizard.htm
NOTE: The Savings Bond Wizard update for the November 1, 2017 savings bond rate release is the final update. As of the next savings bond rate release on May 1, 2018, the Savings Bond Wizard will no longer be available. However, at that time we'll provide instructions on our website on how to convert your Wizard files to the Savings Bond Calculator.
I use eyebonds.info to value my I bonds each month. Of course, this site does not take into account the 3 month penalty if you redeem before 5 years.
Paul K
Posts: 38
Joined: Sat Apr 02, 2016 11:59 am

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by Paul K »

Amphian wrote: Wed Apr 11, 2018 11:09 pm
Paul K wrote: Wed Apr 11, 2018 9:50 pm Why would the Treasury ever want to raise the fixed rate? Are they hoping to attract more investors and borrow at a lower rate than they could using traditional bonds?
Why did they raise the fixed rate in November? (Granted, it was a tiny amount.)
I don't have a good answer, just speculation. Hoping someone here can shed some light.
User avatar
jhfenton
Posts: 4754
Joined: Sat Feb 07, 2015 10:17 am
Location: Ohio

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by jhfenton »

Paul K wrote: Wed Apr 11, 2018 9:50 pm Why would the Treasury ever want to raise the fixed rate? Are they hoping to attract more investors and borrow at a lower rate than they could using traditional bonds?
I'm not privy to their strategy sessions, but I assume I Bond investors are at least a little bit sensitive to market bond rates. And at some point, I Bonds just aren't competitive. (And with 5-year TIPS yields around 0.60%, I wouldn't touch an I Bond paying 0.1% fixed.)
User avatar
Ice-9
Posts: 1579
Joined: Wed Oct 15, 2008 12:40 pm
Location: MD

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by Ice-9 »

I-Bonds have played three roles for me:

1) Inflation-Indexed Bond allocation for retirement savings in the rare instances (like early/mid-2010s) when I-bond rate actually beats the 10-yr TIPS I often buy in my workplace retirement account

2) to become part of the last tier of my emergency fund after the 11-month and three-day holding period (I buy towards the end of the month)

3) occasionally, an alternative to a taxable CD, when in late April or late October the known rate if cashed out at one year (minus 3 months interest) will be comparable or better than 1-yr CD rates at the time. Here, I have the option to keep the I-bond longer than a year, where I wouldn't have that option with the 1-yr CD.

As this is April, I'm buying a small I-Bond amount regarding Role #3, as after accounting for State tax and the 3-mo early withdrawal penalty, I'd come out ahead with the I-Bond over the 1-yr CD.

Next month, I'll buy a small (but larger than April) I-Bond as a contribution to Role #2, and the exact amount I buy will depend upon what new fixed rate is declared on May 1. I don't expect to be buying any I-bonds for Role #1 above for a while, or possibly ever again.
User avatar
#Cruncher
Posts: 3977
Joined: Fri May 14, 2010 2:33 am
Location: New York City
Contact:

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by #Cruncher »

alpenglow wrote: Thu Apr 12, 2018 11:34 amI use eyebonds.info to value my I bonds each month. Of course, this site does not take into account the 3 month penalty if you redeem before 5 years.
The link may not work as alpenglow posted it. If so, try eyebonds.info/ibonds. To "take into account the 3 month penalty if you redeem before 5 years" just use the value three months earlier. E.g., the redemption value in April 2018 of a $25 I Bond with 0.00% Fixed Rate Purchased May 2013 is $26.67 as shown Jan 1 2018. The redemption next month (after 5 years) will be $26.89 as shown May 1 2018.

Now I'm going to get picky and complain against the use of the term "variable rate" in many posts about I Bonds, including in the title of this thread. In Combining the two rates TreasuryDirect says
To get the actual rate of interest (sometimes referred to as the composite or earnings rate) we combine the fixed rate and the inflation rate, using the equation in the example below.
It mentions three rates: "fixed", "inflation", and "composite" (aka "earnings"). Nowhere does it mention a "variable" rate. I suggest just using the rate terms TD uses and avoid adding a new one whose meaning is unclear. (Both the inflation rate and the composite rate "vary" every six months.)

Edited 4/16/2018 5:30 PM to add following:
To simplify my portfolio I probably won't be buying any more I Bonds unless the fixed rate rises significantly. However, I do plan to buy 5-year TIPS at this Thursday's auction. Based on WSJ TIPS Quotes 4/16/2018 [ * ] I estimate the yield will be about 0.6%.

Code: Select all

          2021    2022   Change     2023  Change
         -----   -----   ------    -----  ------
January  0.367   0.466   +0.099    0.532   +0.66
April    0.470   0.535   +0.065   [0.600   +0.65 guess]
July     0.318   0.417   +0.099    0.488   +0.71
* This WSJ link won't work until later tonight. Until then try this one. Also compare my estimate to the Treasury's 0.61% 5-year constant maturity rate for 4/16/2018 on this web page.

Edited 4/19/18 4:40 PM to add following:
The 5-year TIPS auction yield came in at 0.631% (see auction results PDF file), a little higher than my guess of 0.6%.
Last edited by #Cruncher on Thu Apr 19, 2018 3:41 pm, edited 2 times in total.
DorothyB
Posts: 113
Joined: Wed Oct 17, 2012 6:17 pm

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by DorothyB »

Thank you so much for the eyebonds.info/ibonds link!! I compared that to the values I have previously pulled from the TD website and they agree. This like gave me several months of values for both of my purchase dates very easily :)
User avatar
alpenglow
Posts: 1804
Joined: Tue May 31, 2011 12:02 pm

Re: I Bond’s Variable Rate Will Fall To 2.22% On May 1

Post by alpenglow »

DorothyB wrote: Mon Apr 16, 2018 3:44 pm Thank you so much for the eyebonds.info/ibonds link!! I compared that to the values I have previously pulled from the TD website and they agree. This like gave me several months of values for both of my purchase dates very easily :)
I'm glad you found it helpful!
Post Reply