Series I Savings Bonds pay nothing

Well, not quite nothing. But for the first time since these inflation-adjusted savings bonds were introduced in 1998, Series I bonds bought from now through October won't pay any fixed-rate interest. You'll still keep up with the inflation, but only just.

The earnings rate of Series I Savings bonds is a combination of the fixed rate, as set by the U.S. Treasury, plus a rate that tracks the rate of inflation, as measured by the Consumer Price Index. As of May 1, the fixed-rate portion was set at zero percent; the inflation component was set at an annual rate of 4.84 percent. So, based on the current reading, I bonds will pay a 4.84 percent annual percentage yield through the end of October. Every six months thereafter, the payout readjusts to conform with newer CPI readings, but the fixed rate will remain at zero.

On the one hand, not paying anything above and beyond the "official" rate of inflation seems a bit miserly.  However, the interest you earn is exempt from local and state taxes, as long as you don't touch the principal, and finding a commercial instrument yielding as much is a tall order these days.  —Chris Horymski

Comments

[Robert Williams]

this reminds me of when i purchased EE bonds at 6% and later the Government lowered them to 4%
IF we try to lower our tax bill by not paying all due taxes, the government calls us tax cheats-
what do WE call the Government that reneges on there promises?
how about interest cheats!