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Subject:  Question On I Bonds Date:  6/5/2003  4:20 PM
Author:  goodald Number:  7395 of 36328

I tried looking over the treasury direct site but was a little confused about how an I bond's rate will change over time.

I bonds have a fixed rate and a variable inflation-adjusted rate that is added on.

If I bought a bond today, at a fixed rate of 1.10, then bought another 6 months from now, at 1.50% (example): Would the second bond I purchase always have a higher yield?

I'm presuming the first bond would always have a lower fixed rate portion to add to the variable part? Or will the fixed rate change as well?

I was going to buy 5K of I bonds but am thinking it may be worth either waiting till rates improve, or purchase at a slower pace to "average in"...
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