I Bonds are back into positive territory with the Consumer Price Index getting back to inflationary numbers from a slight decline in prices in the previous measurement period. As a result, I Bonds now yield 3.36% through April 30, 2010 that is comprised of a fixed rate of 0.30% and a 3.06% rate for inflation. This represents an increase in both the inflation and fixed components that make up the I Bond Yield. (For more information on how the yield is calculated, click here.)
Back in May, I suggested that you wait to purchase any additional I Bonds until the new yields were announced because for the period May through October of this year, you would have received exactly zero yield as a result of a low fixed rate (0.10% from last period) and a brief period of deflation. At this point, Treasury has increased the fixed rate modestly to 0.30% and inflation, though tame, is enough to put yields well above money market accounts and 'high yield' savings accounts. As a result, if you are filling out an emergency fund or looking for a nice, safe place for cash reserves, I Bonds are back to being your number one option.
Quick Stats on I Bond Fixed Rate Component
- Average Fixed Rate: 1.74%
- Median Fixed Rate: 1.35%
- Standard Deviation: 0.01155
- Lowest Rate: 0.00% (May 1, 2008 to October 30, 2008)
- Highest Rate: 3.60% (May 1, 2000 to October 30, 2000)
To learn more about I Bonds or to start an account with Treasury Direct, click here.
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