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Sabrina Karl
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Sabrina Karl has over two decades of experience writing about savings, CDs, and other banking topics. She is currently a staff writer at Investopedia and one of the country's top experts on how to earn as much as possible on the money you hold in the bank. She previously wrote for Bankrate.com, CreditCards.com, DepositAccounts.com, and RateSeeker.
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Published April 11, 2024
:max_bytes(150000):strip_icc()/Mixetto-7968ca6ca9934c44923e5712017d1c1c.jpg "Have I Bonds? Here's What Your Next Rate Will Be (2)")
Key Takeaways
- I bond rates are recalculated every six months based on inflation.
- With Wednesday's release of new inflation data, we can determine the next interest rate that existing I bonds will earn.
- The new rate is roughly a percentage point lower than the previous 6-month rate.
- Some I bond holders will start earning the new rate on May 1, while for others it will begin between June 1 and Oct. 1.
- Since inflation has come down and lowered I bond rates with it, you can now earn more from a top-paying CD. Top rates range from 4.70% to 5.65% APY.
The full article continues below these offers from our partners.
The Next Rate for Existing I Bonds Is Now Known
I bonds are so named because they're calibrated to inflation. When the inflation rate rises, I bonds pay more. If you now own I bonds, there's a good chance you bought them within the last two and a half years when decades-high U.S. inflation pushed I bond returns to their highest level ever.
But inflation has cooled from a high of 9.1% in June 2022 to 3.5% in the March 2024 reading, which was released on Wednesday. As inflation has come down, so too have I bond rates, making them not as competitive a savings vehicle as they previously were.
And that slide continues. With Wednesday's Consumer Price Index (CPI) in hand, Investopedia can now calculate what the next 6-month interest rate will be for existing I bonds, which will be officially unveiled by the U.S. Treasury on May 1. Every May 1 and Nov. 1, the Treasury announces new rates that will be good for the following six months.
To understand how this works, here's a quick primer. I bond rates are comprised of two components. The first is a fixed rate, which is assigned to every I bond based on its issue date. This rate is fixed for the life of your I bond, up to its 30-year maturity date. The other component is an inflation rate, which is adjusted every six months based on the CPI at that time. Adding the two together gives you a close approximation (within a couple of basis points) of the 6-month composite rate.
To calculate your particular I bond's composite rate, you need to know your fixed rate, and then what the latest inflation component is. We've done the math for you below, for I bonds issued since November 2021. By finding your bond's issue date in the first column, you can see in the last column what your new 6-month yield will be.
New 6-Month I Bond Rates That Will Be Announced May 1
| Your I Bond Purchase Month | Fixed Rate for the Life of Your Bond | New Inflation Calculation on May 1 | Your Next 6-Month I Bond Rate* |
|---|---|---|---|
| Nov 2023–Apr 2024 | 1.30% | 2.94% | 4.26% |
| May 2023–Oct 2023 | 0.90% | 2.94% | 3.86% |
| Nov 2022–Apr 2023 | 0.40% | 2.94% | 3.35% |
| May 2022–Oct 2022 | 0.00% | 2.94% | 2.94% |
| Nov 2021–Apr 2022 | 0.00% | 2.94% | 2.94% |
Note that while the Treasury will announce these new rates on May 1, the month the new rate will begin for you is based on the month your I bond was issued. As you can see below, only people with I bonds purchased in May or November (of any year) will earn the new rate above right away on May 1. For other issue dates, the start of the new rate will be delayed according to this schedule.
| Month Your I Bond Was Issued | Your Interest Rate Changes Every |
|---|---|
| January | July 1 and Jan. 1 |
| February | Aug. 1 and Feb. 1 |
| March | Sept. 1 and March 1 |
| April | Oct. 1 and April 1 |
| May | Nov. 1 and May 1 |
| June | Dec. 1 and June 1 |
| July | Jan. 1 and July 1 |
| August | Feb. 1 and Aug. 1 |
| September | March 1 and Sept. 1 |
| October | April 1 and Oct. 1 |
| November | May 1 and Nov. 1 |
| December | June 1 and Dec. 1 |
How Does the New Rate Compare to Existing Rates?
Because the change in inflation rates over the last six months is less than the change over the previous six months, the calculation of the new inflation component of I bond rates has come down about a percentage point. So for anyone who bought during the popular I bond period of May through October 2022, their current rate of 3.94% will drop to about 2.94%. You can see how the new rate compares to the current rate for several issue dates below.
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Want to know how today's rate compares to further-back periods of your I bond? The table below lays out the various 6-month rates each I bond has or will earn.
| Bond Issue Date | APY for Months 1–6 | APY for Months 7–12 | APY for Months 13–18 | APY for Months 19–24 | APY for Months 25–30 | APY for Months 31–36 |
|---|---|---|---|---|---|---|
| Nov 2023–Apr 2024 | 5.27% | 4.26% (est) | Unknown | Unknown | Unknown | Unknown |
| May 2023–Oct 2023 | 4.30% | 4.86% | 3.86% (est) | Unknown | Unknown | Unknown |
| Nov 2022–Apr 2023 | 6.89% | 3.79% | 4.35% | 3.35% (est) | Unknown | Unknown |
| May 2022–Oct 2022 | 9.62% | 6.48% | 3.38% | 3.94% | 2.94% (est) | Unknown |
| Nov 2021–Apr 2022 | 7.12% | 9.62% | 6.48% | 3.38% | 3.94% | 2.94% (est) |
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.
Today's CDs Offer a Chance to Earn More
With I bond rates for recent issues moving to a range of 2.94% to 4.26%, you can earn more on your savings elsewhere. In fact, you can benefit from some lucky timing right now, as certificate of deposit (CD) rates soared in 2023—and are still paying rates not far below their historic peak. Dozens of nationally available certificates are paying rates of 5% or more, with the nationwide leader offering as much as 5.65% APY.
This means cashing out your I bonds (which you can do after owning them for at least 12 months) and moving the money into a top-paying CD could instantly boost your interest rate by 1 to 2 percentage points, or even more. While you will incur a penalty if your I bond is younger than five years old, it is relatively mild: just three months of the latest interest rate.
The Federal Reserve is committed to bringing inflation closer to 2% from its current level above 3%, and if it's successful, I bond rates will continue to soften. A CD you lock in today, however, guarantees its rate for the full duration of the certificate.
The Best Day of the Month to Cash Out I Bonds
Monthly I bond interest payments from the U.S. Treasury are always paid right away on the first day, and not again until the first of the next month. So once you've collected interest for a particular calendar month, say on the upcoming May 1, there's no reason or additional earnings to be gained by holding the funds any longer during May.
Also, if you're going to move your I bond funds elsewhere, withdrawing on May 1 allows you to receive the May interest payment and then as quickly as possible start earning interest on that money elsewhere, such as a CD or high-yield savings account. By moving quickly, you can collect May interest on your money in two different places.
Even if you simply want to cash out and use your I bond funds, there's no financial gain from waiting beyond the first of the month for your withdrawal.
21 Best CD Rates for July 2024: Up to 6.00% APY
Best High-Yield Savings Accounts for July 2024—Up to 5.55%
Best Money Market Account Rates for July 2024—Up to 5.35%
How We Find the Best Savings and CD Rates
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account's minimum initial deposit must not exceed $25,000.
Banks must be available in at least 40 states. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.
Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy.
U.S. Bureau of Labor Statistics. "Consumer Price Index for All Urban Consumers (CPI-U)."
U.S. Treasury. "Questions and Answers About Series I Savings Bonds," Page 3.
U.S. Treasury. "Questions and Answers About Series I Savings Bonds," Page 1.
TreasuryDirect. "Series I Savings Bond Earnings Rates Effective May 1, 2023."
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