How do savings bonds interest rates work?

Are they fixed interest rates in that when you buy it, it keeps increasing for 30 years at that rate? Or are they ever changing, depending on the economy.

Therefore, do you get the most if you cash out when the economy is good or bad, or should you just wait until the end of the 30 year period?

By | 2013-08-24T03:19:23+00:00 August 24th, 2013|Mortgages Home Loans Interest Rate|1 Comment

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  1. Judy August 24, 2013 at 3:22 AM - Reply

    Lets say you buy a bond today at 3.89% interest.
    Note that interest rates could easily double within a couple of years.
    Say in 3 years the 30 year bond is at 7%.

    If you try to sell that 3.89% bond, no one on earth will want to buy it.
    You will take a hit on your principal.

    Google “Bond Bubble”
    Only buy it if you KNOW you will hold it the 30 year term.
    Consider cd’s at your broker
    I found a 10 year paying 3.4% interest – Schwab and Fidelity have the best.
    They are like bonds when they are brokered – so be careful if you don’t plan to hold it.

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