New I bond purchases improved in two crucial ways this month.

First, the annualized yield of new I-bond purchases made through April is 5.27%, up from the 4.30% annual yield of I-bonds in effect since May, the Treasury Department announced this month.

Second, these I Bonds include a fixed rate of 1.30%, up from 0.9% over the past six months, which will be in addition to the I Bond inflation rate which changes every six months. The fixed rate applies for the entire duration of the bond.

As a result, the new adjusted rate remains a good return for savers looking for an ultra-safe, long-term investment.

“What is really attractive about the new I Bond composite rate is the fixed rate. This is the highest level since 2007, when it was 1.2%,” Ken Tumin, senior industry analyst at LendingTree and founder of, told Yahoo Finance.

“This fixed rate will ensure that your I Bond purchased through April will generate a rate of return of 1.30%, which is 1.30% above inflation,” he added. “It is rare to have a risk-free savings product that guarantees returns above inflation for the next 30 years.”

What are my obligations?

I bonds are a type of U.S. savings bond, debt securities issued by the U.S. Department of the Treasury. Savings bonds are issued as Series EE or Series I, the latter being I bonds.

The main attraction of I bonds: They are guaranteed by the government and guarantee that they will keep pace with inflation because their yield is linked to the consumer price index, or CPI, the government’s official indicator for growth in consumer prices.

These bonds were all the rage two years ago amid soaring inflation, which pushed the annualized rate to 7.12% in November 2021 and a record high of 9.62% in May 2022. The annual rate has since fallen as inflation was brought under control.

New rates on I bonds are set each May and November by the Treasury Department. Due to semi-annual adjustments, the date you purchase your I bonds determines your returns.

The Bond I rate is composed of the fixed rate, which applies over the 30-year life of the bond, and a semi-annual inflation rate calculated from a formula based on the change over six months of the non-seasonally adjusted CPI for all urban sectors. Consumers all articles.

The I Bond Fixed Rate in November 2021 and May 2022 – when rates were soaring – had a fixed rate of 0%. The fixed rate increased last November to 0.4% for those who purchased the bonds through April. It rose to 0.9% in May.

Meanwhile, the new I-bond composite rate is comparable to what certificates of deposit, or CDs, offer today – with yields at or just above 5% at online banks for terms about a year. Treasury bills with maturities of three and six months also fluctuated around 5%, while the yield on one-year Treasury bills exceeded 5%.

US Savings Bonds.  Savings bonds are debt securities issued by the U.S. Department of the Treasury.  They are issued in series EE or series I.

Savings bonds are debt securities issued by the U.S. Department of the Treasury in Series EE or Series I. (Getty Creative) (jetcityimage via Getty Images)

Investing in bonds I

Bonds can be purchased in increments of $25 or more when you purchase them electronically on the U.S. Treasury website, TreasuryDirect, without fees. Paper bonds are sold in five denominations: $50, $100, $200, $500 and $1,000.

Normally, you cannot purchase more than $10,000 of I Bonds each calendar year. There are several ways to increase this amount. For example, you can claim your federal tax refund to purchase an additional $5,000 in I bonds.

Interest is generally exempt from state and local taxes. If you qualify, you may also be able to avoid some or all of the federal income tax savings bond interest when you use them to pay for qualified higher education expenses at an eligible institution or a state tuition plan in the same calendar year that you redeem the eligible I. obligations.

A few restrictions to keep in mind: Although I bonds earn interest for 30 years or until they are cashed in – whichever comes first – you can only cash out after one year. And if you collect before five years, you lose three months of interest.

However, for those who can wait patiently, “I bonds become the ideal emergency fund after five years of holding,” Tumin said. “The higher the fixed rate, the better. »

The US Treasury building in downtown Washington DC, USA at night.

The U.S. Treasury building in downtown Washington, DC at night. (Getty Creative) (traveler1116 via Getty Images)

While not a get-rich type of investment, investors who acquired these far-from-flashy bonds when they were at their highest point in bond history I in 2021 and 2022 have already been rewarded. If you had purchased I Bonds in October 2022, for example, you would have earned 9.62% for six months, then 6.48% for six months. This represents an average one-year return of approximately 8.05%.

The new rate with this more muscular fixed rate, however, gives a little sparkle to any new purchase.

“Bonds at this fixed rate protect your savings from inflation and are protected against deflation,” Dave Enna, founder of, a blog that tracks inflation-protected investments, told Yahoo Finance. “You can never lose a penny of the accumulated capital and the investment will not be affected by market fluctuations.”

Kerry Hannon is a senior reporter and columnist at Yahoo Finance. She is a workplace futurist, career and retirement strategist, and the author of 14 books, including “In control at 50 and over: how to succeed in the new world of work » and “Never too old to get rich.” Follow her on Twitter @kerryhannon.

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