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Series I Bonds Explained  (iBonds)
Inflation Protected Bonds


Earning Rates for Older I-Bonds   -   I Bond Rate History 


 
Series I Bonds are a low-risk, liquid savings product. While you own them they earn interest and protect you from inflation. You may purchase I Bonds at www.TreasuryDirect.gov and at most local financial institutions.

Earnings rates for I bonds are set each May 1 and November 1. Interest accrues monthly and compounds semiannually. Bonds held less than five years are subject to a three-month interest penalty. I Bonds have an interest-bearing life of 30 years.  When the inflation rate is less than zero, a bond's earnings rate is less than its fixed rate (but the earnings rate is never less than zero)

November 1, 2013 Update The Current I Bond Composite Earnings Rate is 1.38% with a Fixed Rate of 0.20%.

                            New Earnings Interest Rates for Older I-Bonds

The earnings rate for Series I Savings Bonds is a combination of a fixed rate, which applies for the life of the bond, and the semiannual inflation rate. The 1.38% earnings rate for I bonds bought from from November 1, 2013 through April 30, 2014 will apply for the succeeding six months after the issue date.

The earnings rate combines a 0.20% fixed rate of return with the 1.18% annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U). The CPI-U increased from 232.773 in March 2013 to 234.149 in September 2013, a six-month increase of 0.59%..
  • Fixed rate  = 0.20%
  • 6 month Inflation rate = 0.59%
  • Composite rate = [fixed rate + (2 x inflation rate) + (fixed rate x inflation rate)] 
  • Composite rate  = [0.0020 + (2 x 0.0059) + ( 0.0020 x 0.0059)]
    Composite rate  = [0.0020 +0.0000118]
    Composite rate  = 0.0138118
    Composite rate  = 0.0138
    Composite rate  = 1.38%

More about Series I Bonds

Composite Rate History
Fixed Rate History
CPI Table


Best Time to Buy I Bonds:  Near the end of the month.  Make sure you leave enough time for funds to clear.

Best Time to Sell I Bonds:  At the start of the month since interest for the prior month is computed on the first of each month.  You don't earn interest for fractional months so sell only after the new interest shows up in your account, usually the first of the month,

I Bond Composite rate = [Fixed rate + (2 x Inflation rate) + (Fixed rate x Inflation rate)]





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