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Monday, November 03, 2008

I-Bond and Series EE Bond Rates for November 2008

Newly issued Series I Savings Bonds (aka iBonds and I-Bonds for "Inflation Protected Bonds") will pay 5.64% and Series EE Bonds will pay 1.30%. I-Bonds are a 100% safe way to defer taxes while getting inflation adjusted return for up to 30 years. These rates for new bonds are effective from November 2007 through April 30, 2009.

More Information and links at "I Bonds Explained"

Earnings rates for I bonds and fixed rates for EE bonds are set each November 1 and May 1. Interest accrues monthly and compounds semiannually. Both have a one year minimuBonds held less than five years are subject to a three-month interest penalty. Both series have an interest-bearing life of 30 years; the EE bond fixed rate applies to a bond's 20-year original maturity.

I Bond Earnings Rate 5.64%, Fixed Rate 0.70%

The earnings rate for I-Bonds is a combination of a fixed rate, which applies for the life of the bond, and the semiannual inflation rate. The 5.64% earnings rate for I bonds bought from November 2008 through April 30, 2009 will apply for their first six months after issue. The earnings rate combines a 0.70% fixed rate of return with the an adjustment for the annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U). The fixed rate applies for the 30-year life of I bonds purchased during this six-month period.

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