A bond is a debt security issued by businesses to get attention from investors who can get their money returned with interest. Everyone knows that interest rates and bonds work together to make money, but did you know that the amount of money paid for a bond directly correlates to the interest rate? For example, if an investor wants $100 billion, the interest rate will be higher than a bond that is only seeking $100 million. As you can see, interest rates can fluctuate based on the market, the price of the bond, and the demand with investors.
There are various markets for bonds, so the rate varies across the board. Currently, the 30-year yield for U.S. Treasury sits at 2.45%. Corporate investment-grade yields are 3.37%, and high yields are 7.67%. United States Savings bond interest rates are broken down by the type of series. Series EE bonds are 0.10% and Series I are 0.26%. Series I divides into variable rates, which are currently 0.16%, and fixed rates, which are 0.10%. Series E bonds haven’t been recorded, but November 2015 to April 2016 varies from 3.98% to 6.00%.Finally, Series HH bonds sit at 1.50%.
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