Quote:
Originally Posted by readytorock
Then how are they able to quote the interest rate of 4.84% on the letter they sent? I see on the site you linked they got that number by multiplying inflation by 2. Will inflation *always* be multiplied by 2 to determine the rate of this bond? I'm confused.
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The number on the treasurydirect website represents semiannual inflation (inflation for 1/2 a year) so the yearly inflation would be double that. Therefore TD is saying that current yearly inflation is 4.84% (2.42% every six months). Buying a bond now will get you inflation + 0% for the term of the bonds, so you will only be keeping pace with inflation, not gaining anything. It might be better to wait until the fixed rate portion of the i-bonds increase above 0.