CPI-U for February increased again to 221.309, up from January’s value of 220.223. With one month remaining before the inflation-linked portion of the May I Bond is known, the increase is already higher than it was in the previous semi-annual change used for the November I Bond rate.
| Sept. | Oct. | Nov. | Dec. | Jan. | Feb. | Mar. |
| 218.439 | 218.711 | 218.803 | 219.179 | 220.223 | 221.309 |
The CPI-U value for January 2011 increased slightly to 220.223. With 2 months remaining before the May I-Bond inflation-linked rate is known, the CPI-U change has been fairly low.
May I Bond CPI-U values
| Sept. | Oct. | Nov. | Dec. | Jan. | Feb. | Mar. |
| 218.439 | 218.711 | 218.803 | 219.179 | 220.223 |
The final 2010 CPI-U value has been released. At 219.179, it continues to slowly rise. From December 2009 to December 2010, CPI-U increased by 1.5%
| Sept. | Oct. | Nov. | Dec. | Jan. | Feb. | Mar. |
| 218.439 | 218.711 | 218.803 | 219.179 |
The CPI-U value for November rose ever so slightly to 218.803.
| Sept. | Oct. | Nov. | Dec. | Jan. | Feb. | Mar. |
| 218.439 | 218.711 | 218.803 |
The I Bond rate for November 2010 through April 2011 has been announced, with a composite rate of 0.74%.
The CPI-U increase of 0.37% resulted in a variable rate of 0.74%. The fixed rate was announced to be 0.00%, meaning the variable rate and the composite rate are the same.
Fixed Rate: 0.00%
CPI-U Rate: 0.37%
Variable Rate: 0.74%
Composite Rate: 0.74%
TreasuryDirect Press Release: http://treasurydirect.gov/news/pressroom/pressroom_comeeandi1110.htm
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)
The CPI-U value for September was released. The new value of 218.439 is up slightly from August’s value of 218.312. More importantly, we now have the full 6 month view of CPI-U used in the November I Bond’s rate.
Based on the March value of 217.631 and September value of 218.439, we know that the inflation-linked portion of the November I Bond will be 0.37%.
| March | April | May | June | July | Aug. | Sept. |
| 217.631 | 218.009 | 218.178 | 217.965 | 218.011 | 218.312 | 218.439 |
