This is just a quick note to say that the March inflation numbers are out, so we can now calculate the new Series I Savings Bond rates that will go into effect in May.
As Iâ€™ve noted in the past, the Series I Savings Bond rate is composed of a fixed and a variable portion. Based on recent inflation data, it looks like the variable portion of the rate will be roughly 4.60%. The fixed rate currently stands at 0%, and it seems unlikely that it will be rising in the current interest rate climate.
If you buy before May, you’ll get the current annual rate of 0.74% for six months, followed by six months at an annual rate of 4.60% (including the current fixed rate of 0%). Personally, I’ll wait and see what the new fixed rate brings. Assuming that it’s still 0%, we may wait until November (when rates change again) to buy more.
While it’s possible to buy and break Series I Savings Bonds after a year for a solid 2.5% CD-like yield, there’s an annual purchase limit on I Bonds, and we’re planning on buying and holding these for the foreseeable future.