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Series I Savings Bond Rate Update (May 2012)

Posted By Jim On 05/29/2012 @ 7:10 am In Personal Finance | 6 Comments

If it’s May or November, it’s time for an update to the rates on a Series I Savings Bond!

As of May 1st, 2012, the Treasury Department announced that the fixed rate on newly issued Series I bonds would remain at 0.00%. Series I bonds have had a 0% fixed rate dating back to November 2010 (they were hardly much higher before then, the last time it was above 1% was back in November 2007 to April 2008 when they were 1.2%). This is not surprising given monetary policy.

The inflation rate predictably, since we can calculate it based on the CPI-U [3], slipped as well to 1.10% from 1.53%, the preceding six months.

Using our handy Series I rate calculator [4], we know that bonds you purchase today will have a yield of 2.20% for the next six months (when the inflation rate will change).

I’ve long thought of Series I bonds as being a good investment [5], useful for that ultra safe part of your portfolio where you just want to get a little more than your average online savings account [6].

In recent years, it’s been a lot more!

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[2] Email: mailto:?subject=http://www.bargaineering.com/articles/series-savings-bond-rate-update-2012.html

[3] CPI-U: http://www.bls.gov/news.release/cpi.t01.htm

[4] Series I rate calculator: http://www.bargaineering.com/articles/series-i-bond-rate-calculator.html

[5] Series I bonds as being a good investment: http://www.bargaineering.com/articles/series-savings-bonds-good-investment.html

[6] average online savings account: http://www.bargaineering.com/articles/high-yield-savings-accounts-rates.html

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