The new fixed rate for I-type Savings Bonds was announced today, and it has decreased from 1.2% to 1.0%, matching the lowest historical fixed rate. This was within my prediction of 1.0 to 1.4%, but one has to wonder if all the mid-October buzz caused them to make the rate lower. Oh well, I bought $5,000 worth in October with the higher fixed rate, so I have until the end of this month to decide whether to buy more. No need to buy now, since they credit you interest for the whole month anways as long as you buy it within November.
If you do buy in November, it will earn 6.73% for 6 months, then 1.0% + a variable rate depending on future inflation adjusted every 6 months. You have to hold at least a year, and you lose the last 3 months interest if you redeem within 5 years.
By Jonathan Ping | Savings Bonds | 11/1/05, 8:11am