{"id":1720944,"date":"2022-11-02T06:06:09","date_gmt":"2022-11-02T10:06:09","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1720944"},"modified":"2022-11-02T07:33:57","modified_gmt":"2022-11-02T11:33:57","slug":"treasury-announces-6-89-rate-on-new-series-i-bonds-for-next-six-months","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/treasury-announces-6-89-rate-on-new-series-i-bonds-for-next-six-months\/","title":{"rendered":"Treasury Announces 6.89% Rate on New Series I Bonds for Next Six Months"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">26<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Ftreasury-announces-6-89-rate-on-new-series-i-bonds-for-next-six-months%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1720944&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"PageBuilder-col-full PageBuilder-col PageBuilder-article\">\n<div class=\"TopBanner-container\" data-top-banner-placeholder=\"true\"><\/div>\n<\/div>\n<div class=\"PageBuilder-col-full PageBuilder-col PageBuilder-article\">\n<\/div>\n<div class=\"PageBuilder-col-9 PageBuilder-col PageBuilder-article\">\n<div class=\"RenderKeyPoints-keyPoints\" id=\"RegularArticle-KeyPoints-4\" data-test=\"keyPoints-1\" data-analytics=\"RegularArticle-keyPoints-4-1\">\n<div class=\"RenderKeyPoints-wrapper\">\n<div class=\"RenderKeyPoints-list\">\n<div>\n<div class=\"group\">\n<ul>\n<li>Series I bonds, an inflation-protected and nearly risk-free asset, will pay 6.89% through April 2023, the U.S. Department of the Treasury announced Tuesday.<\/li>\n<li>Based on the latest inflation data, it\u2019s the third-highest rate since I bonds were introduced in 1998.<\/li>\n<li>However, investors need to consider downsides, such as locking up the funds for one year, and the rate is likely to come down as the Federal Reserve combats inflation.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"ArticleBody-articleBody\" id=\"RegularArticle-ArticleBody-5\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"RegularArticle-articleBody-5-2\">\n<div role=\"button\" tabindex=\"0\" id=\"Placeholder-ArticleBody-Video-107144278\" class=\"PlaceHolder-wrapper\" data-vilynx-id=\"7000271072\" data-test=\"VideoPlaceHolder\">\n<div class=\"InlineVideo-videoEmbed\" id=\"InlineVideo-0\" data-test=\"InlineVideo\">\n<div class=\"InlineVideo-wrapper\">\n<div class=\"InlineVideo-inlineThumbnailContainer\"><img decoding=\"async\" class=\"InlineVideo-videoThumbnail\" src=\"https:\/\/image.cnbcfm.com\/api\/v1\/image\/107144279-16673293121667329310-26335623504-1080pnbcnews.jpg?v=1667330566&#038;w=750&#038;h=422&#038;vtcrop=y\" alt=\"Treasury announces new series of I Bonds at 6.89%\" \/><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-107111194\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<div class=\"InlineImage-imageEmbedCredit\">Jetcityimage | Istock | Getty Images<\/div>\n<\/div>\n<\/div>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\">How I bond rates are calculated<\/h2>\n<div class=\"group\">\n<p>Backed by the U.S. government, I bonds don&#8217;t lose value and earn monthly interest with two parts: a fixed rate, which may change every six months for new purchases but <a href=\"https:\/\/treasurydirect.gov\/files\/savings-bonds\/i-bond-rate-chart.pdf\" target=\"_blank\" rel=\"noopener\">stays the same after buying<\/a>, and a variable rate, which changes every six months based on inflation.<\/p>\n<p>TreasuryDirect announces new rates every May and November.<\/p>\n<\/div>\n<div class=\"group\">\n<div id=\"RegularArticle-DataWrapperChart\" class=\"DataWrapperChart-dataWrapperContainer\"><\/div>\n<\/div>\n<div class=\"group\">\n<p>You can estimate the new variable portion of the rate based on the previous six months&#8217; consumer price index data, which measures inflation.<\/p>\n<p>The Department does not disclose how it determines the fixed portion of the rate, but experts think factors including demand and the yield from Treasury inflation-protected securities influence it. For example, a higher TIPS yield could play into a decision to increase the fixed portion of the rate for an I bond.<\/p>\n<p>While the consumer price index was still <a href=\"https:\/\/www.cnbc.com\/2022\/10\/13\/consumer-price-index-september-2022-.html\">relatively high in September<\/a>, the I bond rate drop reflects a downward trend over the past six months.<\/p>\n<p>Early estimates for the <a href=\"https:\/\/www.cnbc.com\/2022\/10\/14\/series-i-bond-rate-expected-to-fall-to-roughly-6point48percent-in-november.html\">I bond rate were 6.48%<\/a> based on the inflation figures. However, the new rate includes an increase to 0.4% for the fixed portion of the rate, factoring in higher <a href=\"https:\/\/www.cnbc.com\/2022\/10\/12\/how-to-use-treasury-inflation-protected-securities-in-your-portfolio.html\">TIPS yields<\/a>, Tumin said. The previous fixed portion of the rate was zero.<\/p>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\">What the rate change means for older I bonds<\/h2>\n<div class=\"group\">\n<p>If you bought I bonds before the latest rate announcement, the timing of when your rate changes and what it changes to will depend on when your bonds were issued.<\/p>\n<p>For example, if you bought I bonds during September in any given year, your <a href=\"https:\/\/treasurydirect.gov\/savings-bonds\/i-bonds\/i-bonds-interest-rates\/\" target=\"_blank\" rel=\"noopener\">rates will reset<\/a> each year on March 1 and September 1, according to the Treasury. Bought in June? Look for changes every December 1 and June 1.<\/p>\n<p>The headline rate may be different than what you receive, considering that the fixed rate remains set for the life of your bond.<\/p>\n<p>Someone who bought an I bond in September 2004, for example, has 1% for the fixed portion of their rate. Their composite rate reset to 10.67% in September, and will change to 7.51% at their next reset in March 2023, according to <a href=\"https:\/\/treasurydirect.gov\/files\/savings-bonds\/i-bond-rate-chart.pdf\" target=\"_blank\" rel=\"noopener\">Treasury data<\/a>.<\/p>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\">The downsides of I bonds<\/h2>\n<div class=\"group\">\n<p>While the current I bond rate may be attractive, experts point to several downsides. And some of them are potentially costly.<\/p>\n<p>One of the trade-offs is you can&#8217;t touch the money for at least one year. There&#8217;s a three-month interest penalty if you cash in the I bond within five years of it being issued.\u00a0<\/p>\n<p>Another drawback is lower future returns, explained certified financial planner Christopher Flis, founder of Resilient Asset Management in Memphis, Tennessee.<\/p>\n<\/div>\n<div role=\"button\" tabindex=\"0\" id=\"Placeholder-ArticleBody-Video-107143891\" class=\"PlaceHolder-wrapper\" data-vilynx-id=\"7000270990\" data-test=\"VideoPlaceHolder\">\n<div class=\"InlineVideo-videoEmbed\" data-test=\"InlineVideo\">\n<div class=\"InlineVideo-wrapper\">\n<div class=\"InlineVideo-inlineThumbnailContainer\"><img decoding=\"async\" class=\"InlineVideo-videoThumbnail\" src=\"https:\/\/image.cnbcfm.com\/api\/v1\/image\/107143892-16673011171667301115-26329464689-1080pnbcnews.jpg?v=1667304361&#038;w=750&#038;h=422&#038;vtcrop=y\" alt=\"I bonds vs. TIPS: Getting the most bang for the buck\" \/><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Depending on future inflation, the variable portion of I bond interest may adjust down again in May. Aiming for 2% inflation, &#8220;the Federal Reserve is not going to rest until that number comes down,&#8221; he said.<\/p>\n<p>And as interest rates increase, the difference in yields between I bonds and other government-backed assets, such as the <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-17\"><a href=\"https:\/\/www.cnbc.com\/quotes\/US2Y\/\">2-year Treasury<\/a><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\"><span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\"><\/span><\/button><\/span><\/span><\/span>, is getting smaller. &#8220;The relative attractiveness of these assets is dwindling,&#8221; Flis said.<\/p>\n<p>Even with excess money after covering other financial priorities \u2014 no credit card debt, an emergency fund and your 401(k) match \u2014 Flis wouldn&#8217;t pick I bonds as the next option.<\/p>\n<p>&#8220;Long-term investors, specifically younger ones, should really be looking to the stock market for the backbone of their portfolio,&#8221; he said. &#8220;Certainly not I bonds.&#8221;<\/p>\n<div class=\"ArticleBody-blockquote\">\n<h2><strong>Frequently asked I bond questions<\/strong><\/h2>\n<p><strong>1. What&#8217;s the current interest rate?<\/strong> 6.89% annually<\/p>\n<p><strong>2. How long will I receive 6.89%?<\/strong> Six months after purchase<\/p>\n<p><strong>3. What&#8217;s the deadline to get 6.89% interest?<\/strong> Bonds must be issued by April 30, 2023. The purchase deadline may be earlier<\/p>\n<p><strong>4. What are the purchase limits?<\/strong> $10,000 per person every calendar year, plus an extra $5,000 in paper I bonds via your federal tax refund<\/p>\n<p><strong>5. Will I owe income taxes?<\/strong> You&#8217;ll have to pay federal income taxes on interest earned, but no state or local tax<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"WatchLiveRightRail-inline WatchLiveRightRail-container\" id=\"RegularArticle-WatchLiveRightRail-7\" data-test=\"watchLiveRightRail-4\" data-analytics=\"RegularArticle-watchLiveRightRail-7-4\">\n<div class=\"WatchLiveRightRail-contents\"><a href=\"https:\/\/www.cnbc.com\/live-tv\/\" class=\"WatchLiveRightRail-wlButton\">WATCH LIVE<img decoding=\"async\" src=\"https:\/\/static-redesign.cnbcfm.com\/dist\/4db8932b7ac3e84e3f64.svg\" class=\"WatchLiveRightRail-logo\" alt=\"logo\" \/><\/a><a href=\"https:\/\/www.cnbc.com\/live-tv\/\" class=\"WatchLiveRightRail-wlButtonMobile\">WATCH IN THE APP<\/a><\/div>\n<\/div>\n<\/div>\n<div class=\"PageBuilder-col-9 PageBuilder-col PageBuilder-article\"><\/div>\n<div class=\"PageBuilder-col-12 PageBuilder-col PageBuilder-article\">\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Series I bonds, an inflation-protected and nearly risk-free asset, will pay 6.89% through April 2023, the U.S. Department of the<\/p>\n","protected":false},"author":1,"featured_media":1720949,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[547],"tags":[],"class_list":["post-1720944","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-bongino-report"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1720944","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1720944"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1720944\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1720949"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1720944"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1720944"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1720944"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}