Entering text into the input field will update the search result below

New Series I Bonds Offer Attractive Rates

Nov. 03, 2015 2:34 PM ETTIPZ, TIP5 Comments
Kirk Lindstrom profile picture
Kirk Lindstrom


  • Attractive Rates for Conservative Savers.
  • Series I Bond Rates are 1.54% to 5.17% for the next six months.
  • New I Bonds issued for the next six months will earn 1.64%.
  • Series I Bonds never lose money!

Today the Bureau of the Public Debt announced the new earnings rate of 1.64% for Series I (for Inflation) savings bonds issued from November 2, 2015 through April 30, 2016

Series I Bonds, or i-bonds, are a low-risk, liquid savings product. While you own them they earn interest and protect you from inflation. You may purchase I Bonds at www.TreasuryDirect.gov.

Earnings rates for i-bonds are set each May 1 and November 1. Interest accrues monthly and compounds semiannually. I-bonds held less than five years are subject to a three-month interest penalty. I-bonds have an interest-bearing life of 30 years. 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. That means I-bonds NEVER GO DOWN IN VALUE, which is a big advantage over BND or any regular bond funds.

The composite 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.

For the next six months, the earnings rate combines a 0.10% fixed rate of return with the 1.54% annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U). The CPI-U increased from 236.119 in March 2015 to 237.945 in September 2015, a six-month change of +0.77%.

When the inflation rate is less than zero, the earnings rate will be less than the fixed rate but never less than zero.

  1. Fixed rate = 0.10%
  2. 6 month Inflation rate = +0.77%
  3. Composite rate =[fixed rate + (2 x inflation rate) + (fixed rate x inflation rate)]
  4. [0.0010 + (2 x 0.0077) + (0.0010 x 0.0077)]=
  5. [0.0010 + 0.0154 + 0.0000077)] = 0.0164077
  6. 0.0164077 x 100% = +1.64%

Inflation Bond Facts

This article was written by

Kirk Lindstrom profile picture
Started my newsletter Explore Portfolio with $100,000 on 09/30/98.  By 12/31/20 that portfolio, with 60% stocks reached $1,270,794, a 12.1% APR.  Better performance with far less risk than 100% in S&P500 which only did 8.0% APR.  ----Awarded "Timer Digest 2017 Timer of the Year" and "Timer Digest 2013 Bond Timer of the Year" (both shared awards). ----More at http://kirklindstrom.com/Newsletter.html  ----------  2017 Market Timer of the Year  ------------------------------------------------------Starting as a summer intern in 1978, Kirk worked for 20 years as a scientist and engineer at Hewlett Packard's research and development department (R&D) designing solid state devices and components for optical communication. While he was at HP, Kirk invested ten to twenty percent per year of his salary. He made some mistakes early on (starting with paying high fees for "expert" advice that under performed) but soon he learned to invest his own money well enough to afford a life of "semi-retirement" to work for himself. In a way, since leaving HP in 1998, Kirk became his own "angel investor" using his his own money and investing success to finance his lifestyle in Los Altos, California to invest in a new career on the internet helping others do the same.  More at http://kirklindstrom.com/About.html

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (5)

I know that after 30 years US Treasury stop paying interest but I would like to know if I decide not to cash them after they mature, do I have to pay Tax on the accumulative interest that I did not take ??
Kirk Lindstrom profile picture
I am not giving Tax Advice so check this with an expert first, but I BELIEVE after 30 years the US Treasury stops paying you interest and they are happy to hold the money for as long as you want after that.

Think about it. The US Treasury ALREADY has your funds... after 30 years they owe YOU what you paid plus interest. When you request payment, you will owe tax on the accumulated interest so the Treasury will get some of it back, but far less than they had before you cashed it in.
Does IRS require that you must sell them after 30 years
They no longer earn interest. You could buy new issue I bonds or a CD , etc to preserve capital and continue growth
Kirk Lindstrom profile picture

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in October on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 0.2 percent before seasonal adjustment.

More at http://1.usa.gov/1HWc1uf
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

Related Stocks

SymbolLast Price% Chg
PIMCO Broad U.S. TIPS Index Exchange-Traded Fund ETF
iShares TIPS Bond ETF

Related Analysis

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.