New I bond fixed rate 0.70%; EE 1.30%
Monday, November 3rd, 2008
Categorized as: Yesterday's News (old post archive)
New Series I bond Savings Bonds will earn 5.64% for six months, which is the highest rate the U.S. Treasury currently offers on any of its many securities. The rate is made up of a new fixed rate of 0.70% and an inflation component of 4.92%. The fixed rate is good for the life of the bond; the inflation component is adjusted every six months based on changes in the Consumer Price Index.
The spread between the I bond fixed base rate and the 10-year TIPS widened to 2.44 percentage points, the widest spread ever by far. Prior to this the widest spread was May 2008’s 1.50 percentage points. The 10-year TIPS rate on Friday was 3,14%.
The 1.30% rate on new EE bonds shows the Treasury is still fine with taking advantage of EE bond investors.. It’s not only the lowest EE rate ever offered, it’s below Friday’s 1.34% Treasury rate for 1 year securities.