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anoop
Guest
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 Posted:
Thu Dec 16, 2004 2:47 pm Post subject:
Rate and yield in i-bonds |
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In the Savings Bond Wizard, each bond has a rate
and yield, with the yield being (sometimes significantly)
lower than the yield. The rate corresponds to the rate
of interest set by the Bureau of Public Debt for the bond
during each 6-month period.
Can anyone explain what the yield column is?
Thanks,
Anoop
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Rich Carreiro
Guest
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| Posted:
Thu Dec 16, 2004 5:11 pm Post subject:
Re: Rate and yield in i-bonds |
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"anoop" <ghanwani@gmail.com> writes:
| Quote: | In the Savings Bond Wizard, each bond has a rate
and yield, with the yield being (sometimes significantly)
lower than the yield. The rate corresponds to the rate
of interest set by the Bureau of Public Debt for the bond
during each 6-month period.
Can anyone explain what the yield column is?
|
Read the Savings Bond Wizard help documentation. It's right
there. Quoting verbatim from the wizard documentation:
Rate: short for current interest rate; the annual rate your bond
is earning during the Pricing Date; this rate is used to calculate
the interest that accumulates on the Next Interest Date; if a rate
is marked N/A, it means it isn't available because the bond
doesn't have a rate yet (it'll be released with the next values
update)
Yield: short for yield-to-date; it's the annualized percent change
in your bond's cash value from its issue date to the date it most
recently increased in value; it tells you how your bond has
performed since you've bought it; you might think of it as the
average interest rate your bond has earned to date; for Series I,
EE, E Bonds and Savings Notes only; the Wizard doesn't calculate
the yield for Series HH or H Bonds
Also, even though it doesn't explicitly say it, I believe
the Yield figure takes into account the 5-year penalty.
--
Rich Carreiro rlcarr@animato.arlington.ma.us |
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anoop
Guest
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| Posted:
Fri Dec 17, 2004 10:01 am Post subject:
Re: Rate and yield in i-bonds |
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Rich Carreiro wrote:
| Quote: | Read the Savings Bond Wizard help documentation. It's right
there. Quoting verbatim from the wizard documentation:
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Thanks for the pointer.
| Quote: | Also, even though it doesn't explicitly say it, I believe
the Yield figure takes into account the 5-year penalty.
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This seems to make sense since the yield is far lower than
the rate for all of my i-bonds; e.g. for a bond purchased
in 12/2003, the rate is 3.77%, but the yield is only 1.95%,
which struck me as being a little low.
Anoop
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