iBonds: Current Series-I Bond rates

May 1, 2013 Announcement: The Bureau of the Public Debt today announced earnings rates for Series I Savings Bonds and Series EE Savings Bonds, issued from May 1, 2013 through October 31, 2013.

I bond fixed rates are determined each May 1 and November 1. Each fixed rate applies to all I-bonds issued in the six months following the rate determination.

The earnings rate for Series I Savings Bonds is a combination of a fixed rate, which applies for the life of the bond, and the semiannual inflation rate. The 1.18% earnings rate for I bonds bought from from May 1, 2013 through October 31, 2013 will apply for the succeeding six months after the issue date.

The earnings rate combines a 0.00% fixed rate of return with the 1.18% annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U). The CPI-U increased 0.59% between October 2012 to and March 2013.

Fixed rate = 0.00%
6 month Inflation rate = 0.59%
Composite rate =[fixed rate + (2 x inflation rate) + (fixed rate x inflation rate)]
[ 0.0000 + (2 x 0.0059) + (0.0000 x 0.0059)] = 0.0118 = 1.18%

==> I Bond Composite Earnings Rate 1.18%, Fixed Rate 0.00%

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More about Series I Bonds:

When the inflation rate is less than zero, a bond's earnings rate is less than its fixed rate (but the earnings rate is never less than zero).

Historical CPI-U Table - More about I-Bonds

The fixed rate applies for the 30-year life of I bonds purchased during this six-month period.

Earnings rates for I bonds are set each May 1 and November 1. Interest accrues monthly and compounds semiannually. Bonds held less than five years are subject to a three-month interest penalty. I Bonds have an interest-bearing life of 30 years.

For older i-bonds and what they will pay, see: I Bond Composite Rates (iBonds)

Minimum purchase:

$50 for a $50 I Bond when purchasing paper bond certificates
$25 for a $25 I bond when purchased electronically via TreasuryDirect

Maximum purchase(per calendar year):

$5,000 in TreasuryDirect and $5,000 in paper bonds
$10,000 total per social security number

Denominations:

Paper bonds: $50, $75, $100, $200, $500, $1,000, and $5,000
Electronic bonds via TreasuryDirect: purchase to the penny for $25 or more

For more conservative investors who have no interest in individual stocks, I co-edit "The Retirement Advisor" where our most aggressive model portfolio is slightly less aggressive then the "core conservative portfolio" in Kirk Lindstrom's Investment Letter." For more explanation, see Kirk's Two Investment Letters

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Disclaimer: The information contained in this web site is not intended to constitute financial advice, and is not a recommendation or solicitation to buy, sell or hold any security. This blog is strictly informational and educational and is not to be construed as any kind of financial advice, investment advice or legal advice. Copyright © Kirk Lindstrom. Note: "CORE & Explore®" was coined by and is a registered trademark of Charles Schwab & Co., Inc.

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