No. of Recommendations: 4
So the October buyers get 1% + 5.75% (approx) for Oct - Mar, and then they would (currently) get 0% for Apr - Sep. The November buyers get exactly the same, but for Nov - Apr followed by May - Oct. Clear?

Not quite. The October buyers get 1.2% + 3.58% for a total of 4.78% for Oct - Mar, then get 1.2% + 5.72% for Apr - Sep. Whereas the November buyers got a 1% fixed rate, not 1.2%, so they're not getting exactly the same (the fixed rate changed in Nov).

That's why several of us chose to buy in October, rather than November. You were guaranteed 4.78% for the first six months, and 6.92% for the next six months. If the inflation rate results in a 0% rate for the third six month period, we can simply hold for 3 more months, then cash in.

I'll leave it to the math whizzes (which I definitely am not) to calculate what the actual APY would be when held for 15 months. (I suspect it's somewhere around 4.75%--not bad for the pre-tax equivalent of a 15 month CD)

These various scenarious were discussed back in October in this thread:

Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.