We’ve been reporting on the twice-per-year I Bond rate releases. The new rate for November 2024 through April 2025 is slated to be 1.90%, based on inflation reports. Additionally, estimates/predictions are that the fixed rate will be around 1.20% (or possibly a bit less). That gives a total rate of around 3.10% for 6 months.
What this means:
- If you already own I Bonds and keep them, you’ll get just 1.90% interest rate for the six month rate period of November 2024 through April 2025 (plus whatever your fixed rate is from a previous buy).
- If you buy new I Bonds (or I Bond gifts) between November 1, 2024 and April 30, 2025, you’ll likely get around 3.10% for the first six months (1.90% variable + 1.20% fixed). After the six months is over, you’ll get the fixed rate added to whatever the future variable rates are at the time.
For comparison sake: the current rate which runs April 2024 through October 2024 is 4.28% – that comes from a 1.30% fixed rate and 2.98% variable rate.
List of Past I-Bonds Rates
For context, here is a review of past I Bond rates that many of us bought into:
- May 2021 through October 2021 – 3.54%
- November 2021 through April 2022 – 7.12%
- May 2022 through October 2022 – 9.62%
- November 2022 through April 2023 – 6.48% (6.89%)
- May 2023 through October 2023 – 3.40% (4.30%)
- November 2023 through April 2024 – 3.97% (5.27%)
- May 2023 through October 2024 – 2.98% (4.28%)
- (estimate) November 2024 through April 2025 – 1.90% (3.10%)
Pretty much useless now with HYSA’s hovering around 4.5%+
Just leave it in Vanguard VMFXX default settlement fund. Paying 4.9% rolling 7 days and it is 90-100% held in treasuries. Same for fidelity, etc.
I buy after market treasuries at the same rate, one to six month maturity, depending on the market. Same but treasuries aren’t subject to state taxes.
Basically buy this year’s I-Bonds and new years gift box now before November to get best rates. Right?
Yeah, best to lock in the (likely) higher fixed rate now, I’d think
the glory days of ibonds are over for now
HARRIS!!!!!!! Oh wait, we’re supposed to hate inflation, right?
Trump!
6 month treasury bonds pay 4.5 percent so not sure why you would buy these
If you buy before end-of-month, these will pay 1.3% even when inflation is at 0% and HYSAs are at 0%. They’re also tax-deferred until redemption. Could be a good place for part of your emergency fund.
All of the above, not to mention you can cash them out any time after a year (3 month interest penalty for cash out < 5 years will be no barrier when interest rates are low). For some of us, there are major tax cliffs we’re trying to avoid, so certain investments (such as I-Bonds, municipal bonds, etc.) are a lot more attractive.
I’m not sure I’d be investing in I-bonds at the current rate unless I was high income and had upcoming educational expenses.
Not too high income where they can no longer be used for educational expenses.
Main advantage of I bonds is tax deferral for 30 years esp if one plans to be in a lower income bracket (retired) in 30 years
I suppose, but at current rates, you’d likely be better off with a treasury ladder.
Maybe. I bonds do allow to redeem full value after five years and of course hedge against deflation as well as inflation (although stocks are a better inflation hedge over 30 year timeframe).
HYSAs, especially the “normal” ones, are most likely going to see their rates crater as fast as ever they can get away with it. (Remember the reason the ~9% I-bonds were so relatively great is that the HYSAs dragged their feet ridiculously on adjusting those rates: in an efficient world the two rates would not quite converge, but would be close.) By the end of six months, then, I-bonds will probably be looking solidly respectable *as an asset for the back half of your emergency savings or similar*, or for five-year savings projects like down payments, especially with a relatively high fixed component. Putting aside the fluke 2021-22 period, which was more about inefficiency in the HYSA/CD market than about bad pricing by the feds, they’re not meant for return-chasers, but (esp. with the tax deferral and state tax exemption) they have their place.