They are not bought and sold on the secondary market. There are several features of I bonds to keep in mind before investing.įirst, you can only buy I bonds directly from the Treasury. Beginning in November 2022 for the following six months, the Composite Rate will jump to at least 6.47% thanks to inflation. Through October 2022, Composite Rate is 9.62%. The Composite Rate is the annualized rate based on adding the Fixed Rate to the Inflation Rate. Here’s a table of when new rates will take effect: Issue month of your bond Keep in mind that the date new rates apply to a specific I bond depends on the month in which you bought it. As with the Fixed Rate, the Inflation Rate is set on the first business day in May and November. The rate is set based on changes in the non-seasonally adjusted Consumer Price Index for all Urban Consumers (CPI-U) for all items, including food and energy. Unlike the Fixed Rate, the Inflation Rate changes every six months over the life of an I bond. At some bond I bonds will need to keep pace. The real yield on 10-year TIPS (Treasury Inflation Protected Securities) has jumped from negative yields to well above 1%. While I agree with this assessment, it’s a closer call. The argument is that the inflation rate is so high that there’s no need to raise the fixed rate to spark demand. Many predict that the fixed rate will remain at 0%. The big question is whether the Treasury will increase the fixed rate in November. The Fixed Rate is an annual rate that compounds every six months. The Treasury announces the Fixed Rate on I bonds every six months, on the first business day of May and November. It’s been at 0% for much of the past decade. The Fixed Rate was above 3% in the late 1990s and early 2000s. The Fixed Rate is set based on the date of purchase.
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