Series I Bond Rates Set to Decrease in May

Advisors Financial Inc. |

Series I Bond Rates Set to Decrease in May

Since the Bureau of Labor Statistics published lower-than-expected March inflation numbers this morning, investors now have more clarity on how Series I bond interest rates will adjust in May.

Based on the last 6 months’ inflation data, we estimate the interest rate on existing Series I bonds purchased from January-October 2022 will drop from 6.48% to 3.4% starting in May.

For new purchases, we estimate the rate will be 3.8%, but that is still less than investors could earn in a 1-year treasury or CD (over 4.6% as of today’s writing).

One complicating factor is that Series I bonds must be held for at least one year. If redeemed within 5 years, there is a penalty for the last 3 months of interest received.

Although Series I bonds have been a great way to earn yield for the past year or so, it may be time to reevaluate your situation and whether a different investment option would better serve your needs going forward.

For our clients, we are planning to discuss your individual I bonds when we meet for annual reviews. If you have any questions in the meantime, please reach out to the AFI Team.


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