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0.0% Fixed Rate
2.20% Composite Rate
I predicted 0.0% and 2.21%. In my defense, who would have guessed that 2.206% rounded down?
EE Savings Bond Rates & Terms
0.6% Fixed Rate
20 Year Original Maturity
I predicted 0.5% and expected the government to switch to a 25 year original maturity. By keeping the original maturity at 20 years, one can still earn 3.53% over the 20 year period (since the bond is guaranteed to double in price). That's 0.77% more than a comparable 20-year nominal treasury. Praise be to the government savings bond interest rate setting Gods!
As seen in the charts within the links offered below, my interest rate predictions were based on the premise that we were still in crisis mode. These new interest rates therefore mean:
1. We *are* still in crisis mode!
2. The savers continue to be bandersnatched!
O frabjous day! Callooh! Callay!
See Also:
I-Bond Rate Prediction for May 1st, 2012
I-Bond Prediction Update for May 1, 2012
EE Savings Bond Rate Prediction for May 1, 2012
4 comments:
"double your money in 20 years" looks too much like putting the money on red to me ya know.
well, black maybe.
2032 is when the system will be in maximal fiscal stress.
but if you squint right, 80 million geezers spending their children's inheritances is awfully stimulatory if not downright inflationary.
if the PTB would just raise taxes up to the level of spending ($6T/yr+) we'd have one helluva an economy.
Mark,
Thanks for posting the projections and news. I was able to get my last I-bond purchase in on Monday at the outlandish 3.06% composite rate, until it resets. 2.2% composite seems like a rip off until you check the FDIC saving rate caps.
EEs will get you a double ONLY if wait the full 20 years, right?Otherwise, you get 0.6% minus one quarter of interest. Not so good if your time horizon is less than 20 years.
The Treasury is making it clear what to do. Golden Slumbers fill my eyes.
Troy,
Can't claim that a 3.53% rate for 20 years is great. Can only claim that it beats today's nominal treasury yield of 2.76%.
As an added bonus, if rates were to spike up in the next few years then you could bail entirely without having to find a greater fool. Simply cash them out.
Mr Slippery,
EEs will get you a double ONLY if wait the full 20 years, right?Otherwise, you get 0.6% minus one quarter of interest. Not so good if your time horizon is less than 20 years.
Yep.
The sad part is that my savings account is now earning just 0.8%.
The EE Bond isn't all that much worse in the short-term. There is also potential that the short-term eventually becomes the long-term. Sigh.
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