What will the next i-bond rate be?

With the CPI-U linked rate of .77% set for the May-October I-Bond release, it is now time to speculate what the fixed rate value could be. The fixed rate is set by an unknown method, meaning we won’t know until it is announced May 1.

The current fixed rate is 0.30%, which is the 4th consecutive sub-1% rate. With a weak economy, it would make sense that the next fixed rate will remain low to encourage people to spend rather than save, so my guess is that the next fixed rate will be in the .50%-.70% range. My last guess was for a 1.0% fixed rate, which was a full 0.70% difference from the actual 0.30% rate that was announced.

Theoretical Fixed Rate	Composite Rate
0.00%	1.54
0.10%	1.64
0.20%	1.74
0.30%	1.84
0.40%	1.94
0.50%	2.04
0.60%	2.14
0.70%	2.25
0.80%	2.35
0.90%	2.45
1.00%	2.55
1.10%	2.65
1.20%	2.75
1.30%	2.85
1.40%	2.95

 

With the relatively low rate of inflation over the past 6 months, it is unlikely i-bonds will break the 3.0% mark.