Estimated Interest Rate

L1: Estimated Interest RateNeed some help again in reading the Estimated Interst Rates your site says Rate begining 8/1/2006 may be 6.24 with a period begininng 9/1/2006 ending 10/31/2006. I assume this means 6.24 would apply if I open 72T during the above dates. Thanks again appreciate ya”lls wisdom.2006-07-15 07:02, By: Ken, IP: [65.11.101.110]
L2: Estimated Interest RateFrom the estimated rate page…

The maximum interest rate that may be used is any interest rate that is not more than 120 percent of the federal mid-term rate for either of the two months immediately preceding the month in which the distribution begins.
The rate as published by the IRS for August 2006 (not our estimate of the rate) could be viewed as one of two rates available as a maximum rate for a plan started in September 2006or October 2006.2006-07-15 07:12, By: Gfw, IP: [216.80.125.234]

L2: Estimated Interest RateKen,
I think the prime use of the rate estimate is to show the direction of rates. If you know that, it”s less of a gamble to let the earliest month expire. By waiting a month, you know which rate will drop off, and the estimate provides guidance on the degree of risk in letting the time limit pass for the rate that is dropping off.
This same strategy applies to choosing lump sum pension options that are geared to various federal interest rates for a given period, except in this case, you would be looking to access a lower rate for a larger lump sum.
2006-07-16 23:30, By: Alan S., IP: [24.116.165.157]