I Bond Fixed Rate Announcement (May – November 2009)

The Treasury announced the fixed component of the Series I Bond and it was a measly 0.10%. We already knew that the inflation component was going to be a terrible -5.55% based on CPI-U inflation numbers from September 2008 to March 2009. When you couple that with today’s announcement of the fixed interest rate component for bonds sold May – November 2009 set at 0.10%, we can expect bonds to return 0% for the next six months.

I bought I Bonds back in April 2008 to lock in a fixed rate component 1.20%. Using a Series I Bond Rate calculator, my bonds will be earning a whopping 0% (that’s the lowest it can go) for the next six months.

I’m hoping that either the inflation rate goes up next time or they increase the fixed rate component so I’ll have some incentive to buy more bonds. As it stands, the only reason to buy is if you want the full faith and credit of the US Government but you can get that with a savings account (at higher limits too!).