{"id":439,"date":"2009-04-16T22:34:44","date_gmt":"2009-04-17T03:34:44","guid":{"rendered":"http:\/\/fiveforks.com\/ted\/2009\/04\/0_savings_bonds\/"},"modified":"2012-01-08T12:04:49","modified_gmt":"2012-01-08T17:04:49","slug":"0_savings_bonds","status":"publish","type":"post","link":"https:\/\/www.fiveforks.com\/ted\/2009\/04\/0_savings_bonds\/","title":{"rendered":"0% Savings Bonds"},"content":{"rendered":"

You may remember that last April I bought some I Series Savings Bonds<\/a> that promised to pay 6% interest, though not for another six months. It turned out to be a great investment, not just because of the high interest rate, but because it prevented me from investing that money in the stock market, which I would have done otherwise, what with me being tapped out<\/a> by October when the market was still pretty far off the bottom it hit in November and well before falling to new lows just last month.<\/p>\n


\nBy November I was earning 6.07% interest and starting next month I will be at 6.15%. This is because I bought the bond in April and so I am lagging the actual inflation rate by six months while also earning a fixed rate of 1.2% (the fixed rate dropped to 0% a few days after I bought my bond, but I am locked in at 1.2% for the life of the bond plus inflation; it is now 0.7% and due to change again May 1).<\/p>\n

The latest Consumer Price Index was released yesterday and it showed a negative inflation rate during the past year for the first time since 1955. It was pretty small, just -0.38%. But during the last six months, which is what the Treasury Department uses to calculate interest rates on I Series Savings Bonds, it is down 5.55% (the website Savings Bond Advisor<\/a> keeps up with all of this). This means that when the -5.55% inflation component is combined with my 1.2% fixed return, I would actually lose money except that savings bonds are guaranteed not to go negative. Since I am lagging the market, I won’t start “earning” 0% interest until November. The nice thing about that is it gives me a great excuse to sell the bonds in January, forfeiting 3 months of interest as a penalty for cashing the bonds before 5 years (thus a penalty of $0).<\/p>\n","protected":false},"excerpt":{"rendered":"

You may remember that last April I bought some I Series Savings Bonds that promised to pay 6% interest, though not for another six months. It turned out to be a great investment, not just because of the high interest rate, but because it prevented me from investing that money in the stock market, which … Continue reading “0% Savings Bonds”<\/span><\/a><\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-439","post","type-post","status-publish","format-standard","hentry","category-finance"],"_links":{"self":[{"href":"https:\/\/www.fiveforks.com\/ted\/wp-json\/wp\/v2\/posts\/439","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fiveforks.com\/ted\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fiveforks.com\/ted\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fiveforks.com\/ted\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fiveforks.com\/ted\/wp-json\/wp\/v2\/comments?post=439"}],"version-history":[{"count":3,"href":"https:\/\/www.fiveforks.com\/ted\/wp-json\/wp\/v2\/posts\/439\/revisions"}],"predecessor-version":[{"id":1147,"href":"https:\/\/www.fiveforks.com\/ted\/wp-json\/wp\/v2\/posts\/439\/revisions\/1147"}],"wp:attachment":[{"href":"https:\/\/www.fiveforks.com\/ted\/wp-json\/wp\/v2\/media?parent=439"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fiveforks.com\/ted\/wp-json\/wp\/v2\/categories?post=439"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fiveforks.com\/ted\/wp-json\/wp\/v2\/tags?post=439"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}