The time to buy I Bonds before the rate changes is quickly approaching. The current rate for I Bonds is 9.62% which is currently above inflation. What are I Bonds and why should you be buying them? Read on for more information.
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Summary of I Bonds (taken from Treasury Direct site)
Protect against inflation. Earn both a fixed rate of interest and a rate based on inflation. The rate is reset twice a year.
Current Rate: 9.62%
Primarily electronic – keep them safe in your TreasuryDirect account (minimum amount $25)
You can choose to use all or part of your IRS tax refund to buy paper I bonds (minimum amount $50)
Maximum purchase each calendar year: $10,000 in electronic I bonds + $5,000 in paper I bonds
Can cash in after 1 year. (But if you cash before 5 years, you lose 3 months of interest.)
Why buy now?
The current rate of 9.62% is good for all I Bonds purchased until October 31st, 2022. The rate changes in November! This means you will get the rate of 9.62% from purchase date through six months and it will then change to the rate that comes in November. If rates go up then you get another six months at that higher rate. The general consensus is that rates will go down, so now is the time to lock in that higher rate for the next six months.