4 ms·
“if you buy before May this year, you get a guaranteed ~8.5% return over the next 12 months” I don’t think this is correct. They’re going to re-calculate the i
by postpawl 4y ago
“if you buy before May this year, you get a guaranteed ~8.5% return over the next 12 months”
I don’t think this is correct. They’re going to re-calculate the interest rate 6 months from May and it could be less than ~8.5%. So you’re really just guaranteed ~4.25% for half the year.
- OJFord 4y agoNitpick, but that's still 8.5% for half the year; it's 4.25% total return after half the year. But anyway it staying inflation-linked is presumably what people buying it want? The more often it updates the better, could go up too.
- bombcar 4y agoThe key was an Apr 30 purchase locked in 6 months of the rate at Apr and you knew what the next adjustment would be. There are blogs that explain it in detail.
- Trasmatta 4y agoIf you bought in April, you locked in the April rate for 6 months, and then the May rate for 6 more. Both values were known last month, which is why it's ~8.5%. If you buy in May, you lock in the May rate for 6 months and then an unknown rate after that.
- postpawl 4y agoAh, I see: https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm#change https://www.treasurydirect.gov/indiv/research/indepth/ibonds... “We set the inflation rate every six months (on the first business day of May and on the first business day of November)” So by buying in April, the next rate change on your own bond would be in October, which would still be before the next inflation rate change.