10-year TIPS auction yield is 1.43%

Tuesday, January 12th, 2010
Categorized as: TIPS

The high yield was 1.43% in the Treasury’s 10-year TIPS auction held yesterday. The actual interest rate that will be paid by the investment is 1.375% (1-3/8%). Consequently, the price for a $100 bond was set at $99.489212.

The bonds will have an issue date of January 15, so no adjustments for accrued interest or inflation apply to this sale.

TreasuryDirect investors purchased $56,732,300 of the total TIPS sale of $10,388,280,600. This is 0.56% (i.e., much less than 1%) of the total amount invested.

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FDIC Insured Certificates of Deposit can pay 1 or 2% more than savings bonds when held for a similar length of time. See top CD Rates Below:


On January 13th, 2010 Dan said:

Maybe I’m only dreaming, but it sure would be nice if Treasury Direct offered an IRA (or even better a Roth IRA) option. I’d participate in a lot more TIPS auctions if that were the case.

On January 22nd, 2010 Peter Cooper Jr. said:

In the meantime, there are brokerages that will let you have an IRA and participate in TIPS auctions with no fees. I use Fidelity, but I know others are out there too.

But it does seem strange that TreasuryDirect doesn’t handle it itself. In particular, it’d be nice to be able to have I-bonds in a Roth. I hope that the adding of trusts and organizations and the like to TreasuryDirect last year is a sign that they’re working on adding that kind of functionality.

On February 16th, 2010 Patty said:

Those of us in the private sector receive our full social security retirement benefit at age 67. The typical government employee receives both their retirement medical benefit and pension at age 52 (15 years earlier than the rest of us). And they receive $75,000 per year pensions on average while we only receive $12,000 per year social security payouts on average. A typical government retiree package (medical + pension) at age 52 has a present day value of $4,500,000 while the present day value of our social security and medicare at age 67 is only $480,000 (almost 1/10th of the value of their package). At the same time…I fear that the government will take away our U.S. Savings Bonds so that they won’t have to cut government employee pension benefits….is this possible??

On February 17th, 2010 Tom Adams said:

Patty – could you please provide the source of these figures?

I know your very first statement is wrong – you don’t receive the full SS benefit at 67, so I suspect the rest of your us-versus-them message is full of misinformation as well.

So, bluntly, get the facts and stop spewing hate messages.

Tom Adams

On February 17th, 2010 Mary said:

Sorry Tom but the commentor is correct for those born in 1960 and after. http://www.socialsecurity.gov/retirement/1960.html
If you were born in 1960 or later, Your full retirement age is 67

On February 17th, 2010 Patty said:

Hi Tom,
My error. What I should have said is that for people born after 1960…the “full retirement age” (as the Social Security Dept. refers to it) is age 67. See link below for details.


On February 18th, 2010 Tom Adams said:

Patty – I apologize for saying that your first statement was wrong. Although you can continue to increase your SS benefit by retiring after 67, you are correct that the SSA calls 67 “full retirement age.”

But I was hoping you’d provide references for the rest of your statements.

I believe they are misinformation because, for example, my sister is a government employee. She’s a teacher. None of the other facts in your message apply to her.

Do they apply to people in the armed forces? Do they apply to the police or firemen in your town?

To get back on the topic of Savings Bonds – Savings Bonds make up a tiny percentage of the US debt. Most of the debt is held by foreign countries.

There are a lot of reasons for you and those foreign countries to be worried that you won’t get your money back, but I’d put the benefits of government workers near the bottom of the list.

What most concerns me is that the financial system has captured the government. Capitalism has been defined as greed rather than trust. Personally, I place the blame for this squarely on the Bush administration and the Republican congress of that time.

Tom Adams

On February 18th, 2010 greg said:

As a civil service employee hired before 1984 I will be eligible for a fully taxed pro-rated pension at age 55. Some law enforcement and military people can retire earlier. In 1984 the vast majority of federal employees are under the FERS retirement system which combines a limited federal pension with social security the need to work until 62 to get a pension I blame Obama and the Dem controlled congress for bringing in the Goldman Sachs /Wall street gang to keep Wall Street not Main Street in control of our nations financial system. Lets not confuse criticism and distorted facts with hate. PS.The average federal pension is no way near 75K At 30 years service one would get 56% of hi 3yr base pay. A govt pension is in fact much more generous than social security however combine social security and a private pension/profit sharing program private sector plans are often better

On February 18th, 2010 Steve said:
On February 19th, 2010 kevin said:

tom, do you think now is a good time to invest in a tips mutual fund

On February 19th, 2010 Tom Adams said:

Greg – It was the Clinton administration that brought in the Wall Street Gang. The Bush years made it even worse by appointing Henry Paulson – former Chairman and CEO of Goldman Sachs – as Secretary of the Treasury and by not regulating anything. And I agree with you that the Obama administration – for all it’s claims of change – has nothing to be proud of in this area. You are also correct that I may have confused criticism and distorted facts with hate.

Steve – Your link to the Federal Employee Retirement System benefit overview is interesting, but the “typical government employee” doesn’t work for the federal government, but for state and local governments and school districts. Moreover, as Greg points out, these benefits are equivalent to the private sector’s retirement benefits, not to Social Security. Both the private sector and the public get SS on top of the retirement benefits provided by the employer.

Kevin – If you are talking about moving a large sum of money from some other investment into TIPS, I don’t know if now is a good time. If you are talking about beginning to make regular monthly investments in a TIPS fund as part of an overall investment strategy, yes, now is a good time.

Tom Adams

Comments Closed

June 1, 2010

After six years, over 400 posts, 3,680 real comments, and over 90,000 spam comments (thank you, Akismet, for making managing a blog with comments possible), I am closing public comments on Savings-Bond-Advisor.com. I will contine to update the main articles on this site, but not the comments.

Virtually every question about Savings Bonds has been asked and answered on this site multiple times. Use the search feature (see the box in the gray area near the top of this page) or the detailed menu on the lower part of the home page to find the information you're looking for. If you have a copy of Savings Bond Advisor, you can ask me a question here.

Tom Adams

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