I-bonds. Wait for fall reset to buy?

I-bonds are likely going to have a significant bump up (in terms of interest rate) with the fall reset.

It may make sense to wait for the reset if you plan to buy them in 2022.

3 Likes

I-bonds are likely going to have a significant bump up (in terms of interest rate) with the fall reset.

It may make sense to wait for the reset if you plan to buy them in 2022.

Why? Do you not feel as though the current rate of 9.62% is worth putting in money now? You do realize the rate on existing bonds resets, right? You don’t get the rate you buy them at for the duration of the time you hold them for. They will go up and down with inflation.

IP

7 Likes

Why?

Exactly.
They will go up and down with inflation.

I was going to make the same response yesterday, but thanks for the clarification.

I bought into iBonds in May, hoping the yeld will last into 2024. It’s not a big investment but every little thing adds up.
My one contention is that the government is always complaining that Americans don’t save enough, so raise the cap on iBonds to $100,000.

1 Like

Why?

The hope is the fixed rate (real interest rate) will improve.
Currently it’s zero, and that lasts for 30 years.

If inflation goes to 1%, the composite rate on Ibonds bought today will go down to 1%.

Those we bought in 2001 have a fixed rate of 3.4%, currently yielding 13%.

https://www.treasurydirect.gov/indiv/research/indepth/ibonds…

Those we bought in 2001 have a fixed rate of 3.4%, currently yielding 13%.

I have some of those too. It’s been so long since there has been any sort of meaningful fixed rate on Ibonds that I rather figured that was a thing of the past. Seems to me that if they needed to sell more of them, all they would have to do is raise the cap limit per SS number.

IP

1 Like