The higher return is anchored by a permanent 1.40% fixed rate alongside an inflation-adjusted variable metric reflecting September's 3.7% consumer price rise. This fixed component remains attached to an individual bond for its entire 30-year lifespan, giving new purchasers persistent value above baseline inflation. Current owners will experience these updated figures based on their specific semiannual schedules rather than immediately. Investors must still account for strict holding periods, including a complete ban on liquidations during the opening 12 months.
Key points
New purchasers secure a lifetime fixed baseline return that will not fluctuate even as va…: New purchasers secure a lifetime fixed baseline return that will not fluctuate even as variable inflation conditions change.
Existing bondholders will adopt the new yields only when their specific six-month holding…: Existing bondholders will adopt the new yields only when their specific six-month holding cycle resets.
Mandatory one-year holding periods require buyers to treat the government-backed asset as…: Mandatory one-year holding periods require buyers to treat the government-backed asset as an intermediate to long-term allocation.
Sources checked by our analysis pipeline: 1
The U.S. Department of the Treasury has announced new rates for Series I bonds.
Newly purchased I bonds will pay 5.51% annual interest from Nov. 1 through April 30, which is up from the 4.26% yield offered on purchases made through Oct. 31.
The new rate includes a variable portion based on inflation data, and a fixed portion of 1.40%. The fixed rate is up from 0.90% announced in April, and the highest since 2006.
Combined, the composite I bond rate is 5.51% after rounding, according to the Treasury.
Amid the post-pandemic inflation peak, the I bond rate hit a record high of 9.62% in May 2022, and investors poured millions into the government-backed, nearly risk-free asset.
As inflation cooled and I bond rates fell, many short-term investors redeemed I bonds. But investors could return as inflation pushes I bond rates back up, experts say.
"I bonds are a lot more attractive at this point," said David Enna, founder of Tipswatch.com, a website that tracks Treasury inflation-protected securities, or TIPS, and I bond rates.
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