The Treasury Department has set a new annualized rate for I-Bonds—following skyrocketing demand due to inflation.
- “After record-breaking sales of I-bonds in October, the U.S. Treasury is dangling another good deal in front of savers for the next six months,” says MarketWatch.
- For the next six weeks, Series I savings bonds can be purchased with a fixed rate of 6.89% for the next six months until April 30.
- These inflation-resistant bonds can be purchased and held for up to 30 years, with adjustments made biannually to reflect changes in inflation.
- Buyers can purchase $10,000 per year through the Treasury website, plus an additional $5,000 if it is designated as a tax refund. The calendar year resets in January, meaning you can purchase twice before this bond sale ends.
- “After years of pitiful interest on savings and checking accounts, I-bonds, backed by the federal government, are a beacon of financial security,” says The Washington Post.
Why it’s News
Investors have been rushing out in the past month and buying as many I-bonds as they’re allowed as it is a useful hedge against inflation. The Treasury sold nearly $1 billion just on October 27.
The demand for I-Bonds has been so high that it briefly crashed the Treasury’s website on that day as buyers attempted to process purchases before midnight while the bond rate was set at 9.62%.
“To give an idea of how big the surge in traffic has been, [a Treasury] official said ‘In the final days of the rate window, TreasuryDirect.gov has gone from an average number of concurrent visitors of a few thousand to being one of the most visited websites in the federal government,’” says CNN Business.
“It’s not surprising that demand for the inflation-protected savings bond soared in the past week, given that it’s virtually impossible to find any investment that offers a 9.62% return these days, let alone a ‘safe’ one,” CNN continues.
“From November 2021 until Friday, the Treasury Department sold more than $35 billion in electronic savings bonds. That’s a staggering amount of cash people were transferring from their savings and checking accounts—and in stark contrast with the financial situation of other Americans struggling to deal with high inflation. It shows there are many Americans who have money to spare, especially since you can’t sell an I-bond for 12 months,” says The Washington Post.