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IF you bought your bonds before May 1st, you get the fixed base rate of 1.2% vs 0.0% that came out on May 1st. The cumulative rate for those bonds bought before May 1st is 4.28% vs 4.84% on/after May 1st. Where this may get you is on the 6-month anniversary date of the bonds. The bonds bought before May 1st will then readjust to 6.04% in October (1.2% + 4.84%). If you bought the bonds on/after May 1st, then you will be readjusted to whatever the yet unknown inflation rate will be - could be 0% - come Nov 1st when the next readjustment will be. If that rate is 0%, then those bonds would get a 0% rate overall because the base rate is 0%. The bonds only readjust on the 6-month anniversary date of the bond, not on the date the rates are announced unless you bought them on that date. Ex. I bought my bonds on 4/28/08. For the next six months, I will get 4.28% (1.2 base rate + 4.08 factored inflation rate that was announced Nov 1, 2007). On October 28th the rates will be readjusted to 6.04% (1.2 base + 4.84 factored inflation rate that was announced May 1, 2008). The rate will stay in effect until 4/28/09, then it will readjust to whatever the rate is that was posted Nov 1st of 2008. Hope this helps...
By Teresa
