New Series I bond rate for November 2022 – April 2023: 6.89%

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This article has been updated to reflect the current new Series I bond rates for the period November, 2022 to April, 2023. The new US Treasury Series I savings bond interest rate for November 2022 was just announced. The new I bond rate is set at 6.89% APR. While the new current I bond rate is lower than the most recent 9.62% rate (March to October, 2022), it is still one of the highest I bond rates offered since the I bond was launched in 1998. This rate is almost double when I first bought an I bond and wrote about them in my I bond overview. You can buy I Bonds online at the current 6.89% rate till the end of April 2023 and you will get that rate for a period of 6 months from the date of purchase.

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I bonds have exploded in popularity because they are a very safe investment that has offered a strong guaranteed rate of return from the US Treasury in recent years. Comparatively safe bank investments, meanwhile, are offering the following nominal interest rates (source: bankrate.com National average for November, 2022):

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5-Year CD: 1% APR Savings Accounts: 0.16% APR Checking Accounts: 0.09% APR

If you have money in these types of accounts that you don’t need next year (such as emergency savings), it’s potentially worth considering moving on. See the I Bond article above for more basic I bond details, and I’ll also give you a quick primer below.

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What is the new November 2022 I bond rate?

I bond interest rates are a combination of a fixed rate (which you get for the life of the bond) and a variable rate that changes every 6 months. Fixed and variable rates are announced every 6 months (on 1 May and 1 November). The current I bond rate for bond issues between November 1, 2022 and April 30, 2023 is 6.89%. This includes a fixed rate of 0.4’% and a variable rate of 6.48%. The next new variable rate will be announced on May 1, 2023.

How long is the 6.89% convertible I bond rate good for?

You receive an I bond convertible rate for 6 months from the date of issue. Rates are compounded half-yearly. For example, an I bond purchased in January of 2023 would receive a 6.48% APR convertible rate until July of 2023, at which point the variable rate would switch to the variable rate (in addition to 0.4) for the 6 months following May, 2023. Will happen. ‘% fixed rate). The next convertible rate change for that bond will be January, 2024, when the November, 2023 rate will apply for 6 months.

Here’s a chart to help explain:

How much bond can you buy per calendar year?

The number of I bonds you can buy in a calendar year depends on how you buy them:

Individuals (at Treasurydirect.gov): In digital I bonds through the US Treasury Department at treasurydirect.gov, per account holder can purchase up to $10,000 per calendar year. Individuals with a Social Security number can each have 1 account. Must be 18+ to buy. Individual (tax return): When you submit your taxes, use IRS Form 8888 (Joint filers can purchase for each of the 2 filers) as a tax refund payment through the IRS in literal paper bonds per social Security numbers can buy up to $5,000. Return. Living Trust (at Treasurydirect.gov): Living trusts can be purchased in the name of the trust for up to $10,000 per year. It’s definitely a more complicated option, but it’s good to be aware of.

So, hypothetically, one person can buy up to $15,000 per calendar year in I bonds, or a couple can buy up to $30,000 per year. Buying through a trust will open up an additional $10,000 per trust.

Is There an Early Withdrawal Penalty for I Bonds?

What if you need to access the funds immediately, for whatever reason, or in the future I bond rates go up and you want to cash out and buy new I bonds? Here is a breakdown:

The I bond has an expiry of 30 years from the date of purchase. I bonds must be held for at least one year. If an issue is held for less than 5 years (but more than 1 year), the holder can redeem his issue, but will forfeit the most recent 3 months interest return as a penalty. Should I invest in I Bonds?

I am personally investing in I Bonds this year as I currently see them as a safer option with significantly higher returns in the short term than similar investments (eg savings accounts, CDs, MMAs). While those rates may decrease (they won’t be negative) if and when inflation declines, the same is true for deposit accounts, which currently have much lower rates than I bonds. However, no investment is 100% a failure, and I am not your investment advisor, so you should do your research and decide for yourself based on your personal financial situation.

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