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Say farewell to the U.S. I Bond yielding a record 9.6 percent. Say hello to the U.S. I Bond yielding 6.89 percent.
True, the new I Bond yield isn’t as high as the old one, but it’s still higher than you will get from other ultra-safe investments.
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The Treasury Department adjusts the I Bond’s yield semiannually according to changes in the consumer price index (CPI), the government’s main gauge of inflation, over the previous six months. The government announces the yield change on Nov. 1 and May 1 each year. The current yield, the third highest since I Bonds were introduced in 1998, is available through April.
A safe, inflation-adjusted rate
As with other Treasury securities, I Bonds are backed by the full faith and credit of the United States, which means they are backed by the full borrowing power of the United States — the country’s strongest credit backing.
I Bonds, which are U.S. savings bonds, also carry a fixed rate in addition to the variable, inflation-adjusted rate. From May 2020 through October 2022, that rate was zero. The newly issued I Bond, however, has a fixed rate of 0.4 percent. I Bond holders will get the fixed rate plus the inflation adjustment, for an annualized total of 6.89 percent.
Older I Bonds have fixed rates as high as 3.40 percent, which makes the inflation-rate boost particularly sweet for their holders. Those investors will get their original fixed rate as well as the inflation adjustment for the next six months. I Bond yields can never be negative.
Nuts and bolts
You can buy up to $10,000 of I Bonds per calendar year through the government’s Treasury Direct program. To create an account, you’ll need to provide a Social Security number, an e-mail address, and bank account and routing numbers. You’ll also need to create a password and several security checks (such as a password reminder).