Inflation Bonds Are Getting a Big Rate Bump

88 24/05/2022

As the country recovers from the pandemic, rising prices have become a worry for many Americans. But inflation has also driven up rates on some government savings bonds, creating an opportunity for people seeking a safe haven for their cash.

Inflation Bonds Are Getting a Big Rate Bump

New series I savings bonds, known as inflation bonds or I bonds, issued in the next six months will earn a rate of 7.12 percent, the Treasury Department announced this week. That represents the second-highest initial rate ever offered on the bonds, the department said. The new inflation-based rate applies to I bonds issued from November of this year through next April, as well as to older I bonds that are still earning interest.

By comparison, the average rate for a one-year, online certificate of deposit is less than 0.5 percent, according to the financial website DepositAccounts.com.

“It’s a pretty good deal,” said Stephen Biggs, chief investment officer at HC Financial Advisors in Lafayette, Calif., of the current rate on I bonds.

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