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Hello all, I'm brand new to fixed income investments after finding myself tiring of pi$$ing my money away in the equities market. I'm interested (I think) in purchasing some I bonds after listening to Brinker on Money Talk the other day. I went to Treasury Direct and see that they are offering a 6.73% rate of return as of 11/1/05. That sounds nice, but all of the posts here are talking of "down from 1.2% to 1%". What happened to 6.73%?

What is the 1% and how is that transformed into 6.73%? Where does the additional 5.73% come from?

Also, Brinker said that I bonds should be held in a personal (non tax exempt) account because there is no advantage to holding them in a tax sheltered account - I can sort of understand that. But, when referring to TIPS he was clear in stating that they should be held in a tax sheltered account. My question - why?

I don't even know if I'm asking the right questions.
Any clarification regarding these issues would be greatly appreciated.
Trying to stop the bleeding.
Joe Bass
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