Not long ago, I wrote about the likely rates for Series I Savings Bonds starting in May 2012. At the time it appeared that the variable (inflation) portion of the rate would wind up being 1.76%. While the fixed portion was unknown, it seemed likely that it would remain at 0%.
Well, the Treasury has since confirmed this. An overall earnings rate of 1.76% composed of 1.76% variable + 0% fixed rates. So if you buy now, you’ll get 1.76% for the next six months followed by six months at whatever the new variable rate is (announced in May 2013) plus your 0% fixed rate, and so on. Unfortunately, you’ll have to deal with that 0% fixed rate until you redeem your bonds.
If you haven’t bought your allotment for this year, you don’t have much choice at this point. You either buy now (or at least before the end of 2012) or you forego your 2012 purchase limit. Once 2013 hits, you’ll have a choice between buying at the current (1.76%) rate or waiting to see wait May (or even November) brings.