New 2010 I-Bond Rates: Nov 1 through April 30, 2011

The Bureau of the Public Debt today announced an earnings rate of 0.74% for Series I Savings Bonds issued from November 1, 2010 through April 30, 2011.

• New Earning Rates for Older I-Bonds

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 0.74% earnings rate for I bonds bought from November 2010 through April 2011 also will apply for the succeeding six months after the issue date.

The earnings rate combines a 0.00% fixed rate of return with the 0.74% annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U). The CPI-U increased from 217.631 in March 2010 to 218.439 in September 2010, a six-month increase of 0.37%.

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

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.

I Bond Earnings Rate 0.74%, Fixed Rate 0.00%

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 information, see:

• I Bonds Explained
  
• Current iBond Rates
  
• iBond Rate History
• Nov 1, 2010 Press Release

For older ibonds and what they will pay, see:

I Bond Composite Rates (iBonds)

Disclaimer: I own Series I Bonds in my personal account. Due to the small amount of i-bonds you can buy now, I own far more TIPS and TIPS funds in my personal and newsletter (FREE SAMPLE) portfolios.