Treasury Department Sets New Series I Bond Rate at 3.11% for Next Six Months
The U.S. Department of the Treasury has introduced a new annual interest rate of 3.11% for Series I bonds, effective November 1, 2024, through April 30, 2025. This rate marks a decrease from the previous 4.28% yield in place since May and significantly down from the 5.27% rate set a year earlier in November 2023.
The new composite rate of 3.11% consists of a 1.90% variable portion and a fixed portion of 1.20%, slightly reduced from May’s fixed rate of 1.30%. Although the I bond yield has fallen considerably since its peak of 9.62% in May 2022, the fixed-rate component remains attractive for long-term investors, according to financial experts.
Understanding I Bond Rate Structure
Series I bonds offer a composite rate that combines a variable rate, which adjusts based on inflation, and a fixed rate, which remains constant for the bond’s life. The Treasury Department revises both parts biannually, every May and November. Current I bond holders experience the new rates after a six-month adjustment period based on their initial purchase date. For instance, I bonds purchased in September 2024 would start at a 2.96% variable rate, adjusting to the new 1.90% rate in March 2025, while the fixed rate of 1.30% would stay constant, making the composite rate 3.2%.
This structure provides investors with some inflation protection while offering a predictable fixed return for long-term holdings, despite recent reductions in the composite yield.
