May I Bond rate 0.0%

The semi-annual CPI-U rate dropped from 238.031 to 236.119, resulting in a negative variable rate for this period. The resulting variable rate will be 0.00 since bonds can not lose value. The fixed rate was announced at 0.00% again, meaning a new I bond purchased May to October has an initial rate of 0.00%.

November I Bond Rate is 1.38%

The November I Bond rate has been released with a 1.18% inflation-linked rate and a fixed rate of 0.20%. The new composite rate of 1.38% is valid for new bonds purchased between November and April 2014.

The return of a non-zero fixed rate is welcome news after 6 periods of 0%.

November 2013 I Bond Rate Prediction

The CPI-U numbers have finally been released after the delay caused by the government shutdown and we can begin to speculate on the next I-Bond Rate.

September's CPI-U value of 234.149 shows an increase over March's value of 232.773, or 0.59%. The resulting semi-annual inflation component of the November composite rate will be 1.18%, which is the same as it is now.

If we assume the fixed rate portion is not increased again, the resulting composite rate for a new I Bond in November will be 1.18% again.

Theoretical Fixed Rate	Composite Rate
0.00%	1.18%
0.10%	1.28%
0.20%	1.38%
0.30%	1.48%
0.40%	1.58%
0.50%	1.68%
0.60%	1.78%
0.70%	1.88%
0.80%	1.98%
0.90%	2.09%
1.00%	2.19%
1.10%	2.29%
1.20%	2.39%
1.30%	2.49%
1.40%	2.59%

May 2013 I Bond Rate

The CPI-U value increased from September's value of 231.407 to a value of 232.773 in March 2013. The resulting 0.59% semi-annual increase translates to a 1.18% CPI-U-linked rate for the May I Bond. The fixed rate of the newly issued bonds remains 0% for this period of May through November. The resulting composite rate is therefore 1.18% for a newly purchased I Bond.

I Bond Rate for November 2012 - April 2013

As expected, the I bond rate for the period of November 2012 through April 2013 will have a composite rate of 1.76%. The new composite rate reflects the 0.88% increase in semi-annual inflation as mesaured by the CPI-U index and the new fixed rate, which remained at 0%.

As always, the 1.76% rate is available now for newly purchased bonds while the 0.88% CPI-U change will affect currently issued bonds on the 6-month anniversary of the bond's issue date.

Source http://www.treasurydirect.gov/news/pressroom/pressroom_comeeandi1112.htm

What will the next I Bond rate be? November 2012

The CPI-U value increased from March's value of 229.392 to September's value of 231.407, resulting in a semi-annual adjustment of 0.88%. Since we now know the inflation-linked rate of the I Bond rate for November, we can calculate the possible new rates. The fixed rate portion of the new rate will not be known until November 1.

CPI-I values for March - September

March	April	May	June	July	Aug.	Sept.
229.392	230.085	229.815	229.478	229.104	230.379	231.407

Possible November I Bond rates

Theoretical Fixed Rate	Composite Rate
0.00%	1.76%
0.10%	1.86%
0.20%	1.96%
0.30%	2.06%
0.40%	2.16%
0.50%	2.26%
0.60%	2.37%
0.70%	2.47%
0.80%	2.57%
0.90%	2.67%
1.00%	2.77%
1.10%	2.87%
1.20%	2.97%
1.30%	3.07%
1.40%	3.17%

Since the fixed rate has remained at 0% for 2 years now, I strongly suspect it will remain there, resulting in a 1.76% composite rate for new I bonds sold in November. Since the fixed rate can't decrease, there is no benefit to buying I Bonds now or after the November 1 rate change.

May - October 2012 I Bond Rate

As expected, the new I bond rate for May 2012 is a composite rate of 2.20%.

The composite rate reflects the 1.1% in CPI-U for the September-March period and a fixed rate of 0.0%. The fixed rate has now been 0% for the past 2 years.

As always, the 2.20% rate is available now for newly purchased bonds while the 1.1% CPI-U change will affect currently issued bonds on the 6-month anniversary of the bond's issue date.

Source: http://www.treasurydirect.gov/news/pressroom/pressroom_comeeandi0512.htm

View: May 2012 Current I Bond Rate