Date: Mon, 22 Sep 2003 03:59:38 CST
From: anoop@alumni.duke.edu (Anoop Ghanwani)
Newsgroups: misc.invest.financial-plan
Subject: Re: I-Bonds,
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	tests=BAYES_00,QUOTED_EMAIL_TEXT,REFERENCES
	autolearn=ham version=2.53

Rich Carreiro  wrote in message news:...
> kathyae@webtv.net (kat) writes:
> 
> > hmmm... why would anyone wanna buy an I-bond?... what is sooo
> > appealing?... 
> 
> How about a guaranteed real return, zero risk of default,
> and guaranteed not to lose any money?
> 
> > aren't there high rated corporate bonds paying more, or
> 
> I-bonds currently pay 4.66%.  How far out the yield curve do you have
> to get to get a high-rated corporate bond with a 4.66% yield to
> maturity?  And what do you think will happen to the value of that bond
> when interest rates rise?  Remember, if a negotiable bond has a
> duration of N years, its value will drop by N% for every percentage
> point increase in interest rates.  That doesn't happen with savings
> bonds.

I would like to understand how the rates work.

If I buy an I-bond today at 4.66%, will the interest rate on
this particular bond vary over its life?  If so, how do I track
its value at any given time?  I use the Savings Bonds Wizard
to keep track of their value now, but if the rates do change, 
how would the Wizard know?  Would it just require a new version
of the software?

Thanks,
-Anoop