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Series I Savings Bonds: 6.89% interest


MickinMD
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The I-Bonds that began being issued on Nov. 1 and through April 30 with get a 6.48% annual interest rate for 6 months plus a 0.4% fixed annual rate that stays with the bonds for up to 30 years.  That means these bonds will always pay 0.4% more than inflation.

This is a big deal.  The fixed rate for I-Bonds has been 0% most of the time, 0.1% to 0.2% on occasion, and more than that about once every several years.  It's supposed to be an adjustment for the difference between the CPI-U inflation rate and factors that made it lower than it normally would be.

The actual formula for the annual rate is 2 x 3.24% + 0.4% + 0.004 x 3.24% = 6.48% + 0.4% + 0.01296% = 6.89296% which rounds to 6.89.

So you actually get a little more than the 0.4% fixed rate added to inflation.

I have an I-bond with a 0.5% fixed rate and I'm getting 10.14%, instead of 9.62% until it's 6 month anniversary, when it will drop to 7.00% instead of 6.48%.

So today's bonds with the 0.4% fixed rate are good to get if you're thinking of I-Bonds.

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I have $3,000 face value of Series I bonds that I bought in February 2018. I got them as part of my Federal tax return for 2017. Last I checked they are getting 7.72% interest.

I have $1,450 face value of Series EE bonds that I bought between 2002 and 2007. They are now worth more than their face value.

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Grandma bought son Savings bonds for Christmas every year. I have a 2 inch stack in the Safe deposit box. I "think" they are 30 year bonds. Can I cash them in for son? How do I do that? Might be $30k(?) there?

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3 hours ago, Scrapr said:

Grandma bought son Savings bonds for Christmas every year. I have a 2 inch stack in the Safe deposit box. I "think" they are 30 year bonds. Can I cash them in for son? How do I do that? Might be $30k(?) there?

I'm sure you can cash them in - try Googling it.  Personally, I do everything online and my bonds are stored online and accessible at treasurydirect.gov.

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2 hours ago, MickinMD said:

I'm sure you can cash them in - try Googling it.  Personally, I do everything online and my bonds are stored online and accessible at treasurydirect.gov.

I think you can take them in. 30 years ago online was not a thing. And there is a big enough pile I don't really want to enter them in treasury.gov site one at a time. I'd like to know any particular order to cash them. As I understand it they are  taxable on the value minus principle. So dumping them all at one time might bring a good big tax bill. May talk to da bank

 

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