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I recently switched from paper EE Bonds to electronic through TreasuryDirect. I assumed that the interest rate for the bonds that I purchased would be as advertised for that particular period. Recently, they have advertised 2.61%. I didn't notice the "Market-Based Rate" part of the program. So...I have two questions:

1)What, specifically, does "Market-Based Rate" mean?

2)Will the bonds I purchased maintain the same interest rate throughout their interest bearing period (30 years) or does it change according to current market conditions?

I'm a little embarrassed by not looking futher into this before jumping into the program.


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