New I Bond Rate: 3.36%

The new I Bond rate was announced today, resulting in a 3.36% composite rate for newly purchased I Bonds for November 2009 through April 2010.

The new bond rate includes the 1.53% CPI-U linked rate and the newly announced 0.30% fixed rate. This fixed rate is up from last period's 0.10%, but is still fairly low compared to past fixed rates.

I-Bonds purchased in past periods keep their fixed rate, but will adjust to the new CPI-U linked rate on the 6 month anniversary of their purchase.

What Will the Next I-Bond Rate be?

Now that we know the CPI-U linked rate of the next I bond period for November 2009 to April 2010, it is only natural to start speculating what the next fixed rate will be.

The fixed rate of an I-bond is set by the Treasury Department every 6 months in an unknown way, meaning we do not know what the next fixed rate will be. The current fixed rate is 0.10% and marks the 3rd consecutive sub-one percent fixed rate.

My personal guess is that we will see a return to the 1.0% fixed rate based on recent positive behavior in the economy. That would result in a composite rate of 4.08%.

Potential Composite Rate values based on potential fixed rate values

Theoretical Fixed Rate	Composite Rate
0.00%	3.06%
0.10%	3.16%
0.20%	3.26%
0.30%	3.36%
0.40%	3.47%
0.50%	3.57%
0.60%	3.67%
0.70%	3.77%
0.80%	3.87%
0.90%	3.97%
1.00%	4.08%
1.10%	4.18%
1.20%	4.28%
1.30%	4.38%
1.40%	4.48%

I-Bonds Info

Next Composite Rate for Existing I-Bonds

Given the November-April CPI-I linked rate will be 1.53%, we can now calculate the composite rate of already issued I-bonds.

Composite rates for I-bonds during the November 09 - April 10 period

Fixed Rate	Composite Rate
0.00%	3.06%
0.10%	3.16%
0.70%	3.77%
1.00%	4.08%
1.10%	4.18%
1.20%	4.28%
1.30%	4.38%
1.40%	4.48%
1.60%	4.68%
2.00%	5.09%
3.00%	6.11%
3.30%	6.41%
3.40%	6.51%
3.60%	6.72%

I-Bond Rates

September CPI-U Value Released

The CPI-U value for September increased again to 215.969, finishing the CPI-U change for the next I-Bond's rate. The November I Bond will have a CPI-U linked rate of 1.53%. This means, even if the fixed rate portion of the new bond is 0%, we are still looking at a new composite I Bond rate of 3.06%. We will know the actual fixed rate on November 1.

CPI-U Values for the November I Bond rate.

Mar.	Apr.	May.	Jun.	Jul.	Aug.	Sep.
212.709	213.240	213.856	215.693	215.351	215.834	215.969

 

 

I-Bonds and CPI-U values

August CPI-U and I-Bonds

The CPI-U for August rose slightly to 215.834 over July's value of 215.351.

Mar.	Apr.	May.	Jun.	Jul.	Aug.	Sep.
212.709	213.240	213.856	215.693	215.351	215.834

 

With only one month remaining for this period, we should have a positive CPI-U rate for the November I-Bond. Hopefully the 0% days will come to a close soon.

 

I-Bonds and CPI-U values

July CPI-U Update

The CPI-U value for July decreased slightly to 215.351 from June's value of 215.693

Mar.	Apr.	May.	Jun.	Jul.	Aug.	Sep.
212.709	213.240	213.856	215.693	215.351

The next rate is based on the difference between Match and September, so we have 2 more periods to watch before estimating the next rate.

I Bonds

June CPI-U Update

The CPI-U value for June rose again to 215.693 from May's value of 213.240.

The CPI-U for this semi-annual period used to adjust the I Bond rate has increased 1.4% so far, with 3 more monthly periods left to measure.

Mar.	Apr.	May.	Jun.	Jul.	Aug.	Sep.
212.709	213.240	213.856	215.693

I Bonds