Friday, October 16, 2009

Looks Like I'm Gonna Start Buying I-Bonds Again

In October 2008, I started buying $25 worth of I-Bonds every month to create a tax advantaged "income stream" in retirement. I know it's not much, but since I-Bonds are supposed to "keep up" with inflation, I should be able to buy a couple of lunches every month with my I-Bonds when I'm in my 60's. :-D

Between October 2008 - April 2009, I was getting 4.83% - 5.64% APY on my I-Bonds for 6 months. But between May 2009 to October 2009, new I-Bond purchases were only getting 0.00% APY for 6 months. Not worth buying, so I've stopped.

All of my purchases have also re-set to 0.00% APY for the next 6 months and I was strongly considering just redeeming them once I've held them for the requisite 1 year.

But based upon Bureau of Labor and Statistic's new September CPI figures, new I-Bond purchases should be getting atleast 3.07% APY. My current I-Bonds will also re-set to rates between 3.07% - 3.78% on a rolling basis the next 6 months.

Since ~3.07% APY is better than anything I'm getting in any of my savings accounts, I think I'll start buying I-Bonds again after November 1. Maybe I'll buy an additional $150 to cover the past 6 months that I didn't purchase. And I guess I won't be redeeming my current I-Bonds either.


In Debt said...

Oh! I hope you're right. I looked at buying I-Bonds during this 0.00% 6-month period too, and just held onto the money. And no way I'm buying an E-bond with a FIXED 0.7% rate.

I am thankful however for some old (early 90's) E-bonds that are paying a fixed 4%. They look pretty attractive right now.

Will have to check out the Treasury Direct site on 11/1!!! Thanks for the heads up.

Miss M said...

I actually bought a few I's myself recently, I think the fixed is 0.2%. Whatever, at least it's secure. I'm going to continue putting my little snowflake money into them regardless, I take on enough risk with my heavy investing.