How are the rates of bond savings determined?

Determination of bond savings rate is largely dependent on the percentage of the fixed rate and the inflation rate. In addition to the regular release of these rates, most governments do not reveal what is going to determine the rate, especially a fixed rate. In order to maintain saving bond rates somewhat competitive with other savings products, it is possible that factors, such as the main interest rate and other policies of the country's central bank, have a great influence.

In the United States, a fixed rate is issued every May and November and serves as a basic rate for savings bonds throughout their lives. This rate generally ranges from 0 percent to 5 percent. The rate of savings bonds, which has a fixed rate of zero, does not mean that no interest will be offered. This will ultimately depend on a different main extent known as the degree of inflation.

While rates with fixed savings bonds are known when one buys bonds, explanation of what goes to IS rates is usually not offered. As already mentioned, many analysts canE be willing to offer a forecast about the new rates of bonds with fixed savings. This analysis can be based on what the analyst feels is a good formula that needs to be used on the basis of past history. However, nothing is guaranteed and may not be in the best interest of the investor.

As regards the rates of bond savings, the inflation rate could be the biggest unknown factor in buying savings bonds. The inflation rate is based on the consumer price index and is also issued every six months, during the months of May and November. Once the total rate is combined with a fixed rate, it provides earnings for bonds for six months. The inflation rate can go up from less than half a percent, but generally remains less than 3 or 4 percent every six months.

In rare circumstances, there could be time when Brazi nd's savings are in fact a negative percentage and therefore a debt wouldHography could have been less than when it was purchased. This could happen if the fixed rate remained at zero and the inflation rate was a negative number, as one example. The only time to happen is when the period is deflation. Deflation in the United States did not happen since great depression, but some countries began to experience deflation in the first decade of the 21st century.