“Inflation-proof” I-bonds get new interest rate of 6.9% for the next 6 months
Federal Reserve expected to raise interest rates for sixth consecutive time this year
The Treasury has set a new interest rate for I-bonds, the normally staid investment vehicle that’s seeing a surge of popularity amid decades-high inflation .
I-bonds issued over the next six months will yield an initial annualized return of 6.89%, the Treasury said Tuesday.
The rate on I-bonds, or inflation bonds , changes every six months based on inflation . In the most recent six-month period that ended in November , the bond rate was 9.62% — rivaling stock market returns and leading to a rush of consumers hurrying to buy before the rate reset on November 1. The surge in investor demand crashed the Treasury’s website last week..A Treasury spokesperson said the government sold as many bonds in a single day as it sold in the entire period between 2018 to 2020 — roughly $1 billion.While the current rate of 6.89% is below recent highs, financial pros say it’s still a solid investment for people who have some cash they would otherwise put in a savings account or CD .”That’s still above average rates out there,” Alex Rezzo, founder of Andante Financial, told CBS MoneyWatch recently. “You could buy a 30-year investment-grade bond, and that’s offering only 5%.”
The rate on I-bonds, or inflation bonds, changes every six months based on inflation. In the most recent six-month period that ended in November, the bond rate was 9.62% — rivaling stock market returns and leading to a rush of consumers hurrying to buy before the rate reset on November 1.
“That’s still above average rates out there,” Alex Rezzo, founder of Andante Financial, told CBS MoneyWatch recently.
