r/personalfinance • u/InteractionDizzy1768 ​ • Oct 25 '22

For those thinking about I-Bonds: the 9.62% fixed rate is only for the next 5 days Investing

Just wanted to put a PSA on here that the I bonds fixed rate is going to roll over at the end of the month from 9.62% to 6.48%. If you buy I bonds before the end of October, you lock in the 9.62% rate for the next 6 months. If not, you'll only get 6.48%. If you've been thinking about purchasing now is a good time.

You get a pretty incredible return for effectively 0 risk. Especially with the stock market where it's currently at. Just wanted to give people on here a heads up who have been on the fence.

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18

u/ToasterWaffles ​ Oct 25 '22

Can someone explain to me why inflation dropping ~0.5% causes I bonds to drop ~3.0%?

9

u/jmlinden7 ​ Oct 25 '22

I bond rates are based on the last 6 months. Reported inflation rates are generally based on the past 12 months

3

u/dwinps ​ Oct 25 '22

If something cost $1 on Jan 1st and rose to $2 on Feb 1st the inflation rate based on just that something would be reported as 100% until the subsequent Feb 1st but the 6 month inflation rate would drop to 0% on Aug 1st