With the inflation portion of the next bond’s rate set at .37%, we can now list out the possible composite rates based on various fixed rates. The fixed rate portion only matters for new bonds purchased between November and April 2011 as all bonds issued prior to that will retain the fixed rate they were issued with.
The current fixed rate is .20%. Buying an I Bond now would allow you to get the current 1.74% rate through to April, when it would change to 0.94%.
| Theoretical Fixed Rate | Composite Rate |
| 0.00% | 0.74% |
| 0.10% | 0.84% |
| 0.20% | 0.94% |
| 0.30% | 1.04% |
| 0.40% | 1.14% |
| 0.50% | 1.24% |
| 0.60% | 1.34% |
| 0.70% | 1.44% |
| 0.80% | 1.54% |
| 0.90% | 1.64% |
| 1.00% | 1.74% |
| 1.10% | 1.84% |
| 1.20% | 1.94% |
| 1.30% | 2.04% |
| 1.40% | 2.15% |
Based on the FDIC, the current average savings account rate is 0.18% while a 60 month CD averages out to 1.66%, so I Bonds remain competitive to cash accounts. (http://www.fdic.gov/regulations/resources/rates/historical/2010_10_18.html)
