In an e-mail to me, you recommended a “AA”-rated premium bond maturing in 2043 and callable in 2020, with a yield-to-call of 2.60%. You said it represented “outstanding value.” I don’t agree. We’re in a 3.30% market for that quality of bond, and it’s almost certain to be called on its call date in five years unless interest rates rise dramatically.
- E.O., Alabama
We agree, this is a 3.30% market, and we are sure you’re aware this rate applies to “AA” quality bonds with 30-year maturities, whereas the rate on similar quality five-year bonds would be approximately 1.50%. ... more