Buying US Treasury bonds

[jacknapier]

Hm, I have some physical paper printed 30 year us treasury bonds that are now mature. (Getting old sucks) I'm thinking that since I don't need the money right now, I should just buy some more bonds with the money, since they're mature and not collecting interest right now, but the problem is that interest rates are low now. At least, that's what I'm told and I don't know much about bonds other than what they are.

Anyway, if I buy the bonds now, as in today, and the fed decides to raise interest rates in, I don't know, 2014, will the interest rates of those bonds that I bought TODAY raise with those hypothetically raised rates? Or would they just remain at the same crappy interest rates they are today?

 

[scose-no-doubt]

no your bond will drop in value to match the return offered by newer issued bonds with higher rates meaning you'll have a paper loss which you wont realise if you hold to maturity. If you sell them before they mature you'll take the hit.

 

[intradaybill]

Interest rate will not rise but you will be able to reinvest your coupon proceeds at a higher interest rate, essentially raising your yield for the holding period to current yield. That is the idea anyway.

As score-no-doubt said, if rates rise and you sell before maturity, you will lose money. FED is currently selling short term and buying longer term so I would go with 5-Year notes maximum. But you should contact a licensed professional because I do not think anyone in here qualifies to offer you advice because they do not know you and your wealth and needs.