The US Treasury recently reported on April 16th that Inflation now stands at 4.83% for the last 6 months. The rate is based on the difference between the Consumer Price Index (CPI) in September and the latest CPI in March.
If you are holding any Series I Savings Bonds this is uplifting news. To determine what I bonds will earn during the next six-month rate period, just add the fixed base-rate to the 4.83% inflation rate. The fixed-base rate for your I bonds can be anywhere between 1.0% and 3.6%, depending on when the I bond was issued.
Gee, don’t we all wish we had more I bonds? You can purchase some today with the current fixed base rate of 1.2% to earn a composite rate that is over 4.2% for the next six months, which will then be followed by six months at over 6.0%. That rate certainly beats money markets, saving accounts, CDs, US Treasury securities and even Treasury Inflation Protected Securities (TIPS).
Maybe we should all go out and load up on I bonds? Only problem with that is the US Government limits the annual purchase amount for savings bonds. As it currently stands, we are limited to $5000 per social security number per type of bond. For some reason, the Treasury considers paper and electronic bonds to be different types, so you can purchase $5000 in paper I bonds at a bank and another $5000 electronic I bonds at Treasury Direct for a total of $10000.
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5 years ago
I hope everyone out there now wish that they have purchased some bonds with the current ongoing financial crisis of the country. Great post!
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