I Bonds to Earn 6.73% When Bought From November 2005 Through April 2006 (U.S. Savings Bonds)

Bureau of the Public Debt, Dept of the Treasury ^ | November 1, 2005 | Uncle Sam

[baseball_fan]

I BOND EARNINGS RATE 6.73% The earnings rate for Series I Savings Bonds is a combination of a fixed rate, which will apply for the life of the bond, and the inflation rate. The 6.73 percent earnings rate for I bonds bought from November 2005 through April 2006 will apply for the first six months after their issue. The earnings rate combines the 1.00 percent fixed rate of return with the 5.70 percent annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U). The CPI-U increased from 193.3 to 198.8 from March to September 2005, a six-month increase of 2.85 percent.

[baseball_fan]

6.73% for boring savings bonds? I assume overseas countries can buy iBonds too like other Treasury debt. Might this contribute to the dollar going up? 5.70% inflation?

[SFC Chromey]

best deal now is TIPS; The Treasury Inflation Protected Securities.

They will continue to ratchet up as inflation climbs. I'm guessing rates will continue to climb much like what we saw in the late seventies early eighties.

[baseball_fan]

"They will continue to ratchet up as inflation climbs."

I assume the 5.70% CPI-U includes food and energy which will hopefully be temporary spikes, otherwise that looks high.