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Key Takeaways
- I bond rates adjust twice a year based on six months of inflation data. Today’s Consumer Price Index (CPI) report allows us to project what the Treasury will announce next week.
- With inflation ticking higher, the next I bond rate will increase by about a quarter point—up to 4.42% for some bondholders.
- Some I bondholders will receive the boost on Nov. 1, while others will see it between Dec. 1 and April 1, depending on the bond’s issue date.
We Can Now Predict the Next I Bond Rate—Here’s What’s Changing
Inflation is usually bad news for your wallet—but for I bondholders, there’s a silver lining. The CPI released today shows prices rose 3.0% over the past year, up from a 2.4% rate in March. Because I bond yields are tied directly to inflation, that upward trend means a higher payout is on the way when the Treasury updates I bond rates on Nov. 1.
The yield that I bonds pay is recalibrated twice a year using inflation data from the prior six months. With today’s CPI report in hand, we can now estimate what the new rate will be for existing bonds—and it’s set to move about a quarter percentage point higher.
Here’s a quick refresher on how each I bond’s rate is calculated. I bond returns consist of two parts: a fixed rate that’s locked in for the life of your bond (up to 30 years) and a variable inflation rate, which changes twice a year—May 1 and Nov. 1—according to the CPI. Add the two together, and you get the composite rate—the yield your bond earns for the next six months.
Below, we’ve done the math for all I bonds issued since November 2021, so you can see how your own rate will change once the new adjustment takes effect.
Why This Matters for You
Higher inflation isn’t good for most savers—but it does mean a slightly better return for I bondholders. The latest CPI data confirms that your next six-month rate will tick about a quarter percentage point higher.
Tip
For future I bond purchases, we won’t know the fixed-rate component until Treasury makes its announcement on Nov. 1. We know it will have the same inflation component of 3.12% as existing bonds, but Treasury does not publish its formula for determining new I bonds’ fixed component.
When Your I Bond Rate Will Adjust
Note that while the Treasury is set to announce these new rates on Nov. 1, the month the new rate will begin for you is based on the month your I bond was issued. Only people with I bonds purchased in May or November (of any year) will earn the new rate indicated above on Nov. 1. For other issue dates, the start of the new rate will be delayed according to this schedule.
Tip
Have I bonds purchased before November 2021? Every 6-month rate for all bond issue dates going back to 1998 can be found in the U.S. Treasury’s I Bond Rate Chart.
Thinking About a New I Bond? Move Fast Before the Rate Resets
According to estimates by some industry experts, the fixed-rate component for I bonds issued Nov. 1 or later will almost certainly be lower than the most recent 1.10% fixed rate—perhaps as low as 0.90%. That means if you’re considering buying new I bonds soon, you’re better off buying before Nov. 1. Ideally, you’ll want to make your purchase from Treasury Direct by Oct. 28 or 29 to allow some time for the bond to issue by Oct. 31.
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