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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: ATL on August 21, 2013, 07:57:49 PM

Title: I Bond buy timing?
Post by: ATL on August 21, 2013, 07:57:49 PM

I just set up a TreasuryDirect account and would like to purchase the max amount of I bonds. It looks like the next rate adjustment is Oct 31 and since there have been much discussion about higher interest rates, is it reasonable to wait until Nov 1 to pull the trigger rather than now?  It's possible that it may be flat but I'm wondering if it would be worthwhile holding off to see if the rate will be higher. What do you think?

Title: Re: I Bond buy timing?
Post by: madage on August 21, 2013, 08:17:34 PM

I suggest reading this (http://www.mymoneyblog.com/savings-i-bonds-may-2013-update.html). The gist: wait to see what the new rate will be, then decide if it's best to purchase before the end of October or wait until November.

Title: Re: I Bond buy timing?
Post by: ATL on August 21, 2013, 08:23:04 PM

Ahh...I didn't realize they announced rates in advance. Thanks!  Will keep an eye out as the date draws closer.

Title: Re: I Bond buy timing?
Post by: dragoncar on August 21, 2013, 08:35:28 PM

I really doubt the base rate will go up.  CPI will adjust.

Title: Re: I Bond buy timing?
Post by: icefr on August 22, 2013, 03:03:32 PM

If you buy them at the end of the month, you still get credit for the whole month. And if you sell them at the beginning, you still get interest for the whole month.

Title: Re: I Bond buy timing?
Post by: ATL on August 23, 2013, 07:50:38 PM

Thanks fir your feedback, Dragoncar and Icefr.  Icefr, good to know about how the rate accumulation works. Thanks again!

Title: Re: I Bond buy timing?
Post by: madage on October 16, 2013, 05:28:53 AM

Quote from: ATL on August 21, 2013, 08:23:04 PM

Ahh...I didn't realize they announced rates in advance. Thanks!  Will keep an eye out as the date draws closer.

Unfortunately, due to the government shutdown, the data used to calculate the new rate has not yet been released. The speculation (http://www.mymoneyblog.com/savings-i-bonds-2013-rate-speculation.html) on mymoneyblog.com is the new variable rate will be around 1%, but could be higher.

Title: Re: I Bond buy timing?
Post by: Chris on October 16, 2013, 01:53:51 PM

Quote from: ATL on August 21, 2013, 08:23:04 PM

Unfortunately, due to the government shutdown, the data used to calculate the new rate has not yet been released.

Which brings an interesting question: what happens if the government doesn't restart before the rate is supposed to reset? What's the contingency plan?

The three alternatives I see are: 1) keep the same rate, 2) reschedule the reset date, 3) set the new rate using the data available