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Friday, May 01, 2009

New I-Bond Rates; New iBond Composite Rates

The Bureau of the Public Debt today announced an earnings rate of 0.00% for Series I Savings Bonds issued from May through October 2009. Earnings rates (also know as the composite 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.

I Bond Earnings Rate 0.00%, Fixed Rate 0.10%

For more information, see:
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 0.00% earnings rate for I bonds bought from May through October 2009 will apply for their first six months after issue. The earnings rate combines a 0.10% fixed rate of return with the -5.56% annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U). 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).

The fixed rate applies for the 30-year life of I bonds purchased during this six-month period.

The CPI-U decreased from 218.783 to 212.709 from September 2008 through March 2009, a six-month change of -2.78%.

For older ibonds and what they will pay, see:



1 comment:

  1. To Bob Brinker,
    I have been a listener now for 3 years and counting. I had a question about I-bonds. I hear that I-bonds are a great way to invest in especially when dealing with inflation. I know that right now there is no inflation, but I am worried in the future there will be. At 36 years of age am I too young to invest in I-bonds and is this a good time to invest in them? Thanks Bob

    Leslie Freday lfreday32x@msn.com

    ReplyDelete

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