4 ms·
I bought one in the early 2000's, should be getting about 10% on it. The trouble with these is that the fixed rate has been 0% for some time now. If inflation
by seniorThrowaway 5y ago
I bought one in the early 2000's, should be getting about 10% on it. The trouble with these is that the fixed rate has been 0% for some time now. If inflation does go down you could end up with a very low yielding bond. I forget what exactly it equates to on a yearly interest basis but series E bonds don't really pay squat until they hit the 20 year mark, at which time they are guaranteed to double. I wish when I was younger I had put the max into those each year I was able to, that's a nice little "pension" when you are older.
- loeg 5y agoE bonds are guaranteed to double in value at 20 years, for a nominal (not inflation adjusted) ~3.5% return. They yield almost nothing before the 20 year term.
- seniorThrowaway 5y agoThanks. They were a decent deal back in the low CPI days.
- anthony_r 5y agoFYI, normal TIPS have the fixed rate well below zero (which makes the total yield add up to close to where the fixed rates bonds trade at, around 1-2%). These retail instruments are kind of no brainers if their fixed rate is artificially not allowed to drop below zero.
- itake 5y agoWith todays market, or even yesterdays, taking 20 years to double in value seems low IMHO. At 5% interest, it takes 14 years to double. At 10%, 7.2 years.