TreasuryDirect.gov just posted the new I Bond rate – 2.20% – that will hold for purchases through Oct. 31, 2012. That is down from the rate of 3.06% that held from November 2011 through April 2012.

I Bonds pay an interest rate that combines two factors: 1) the base rate, which has been set at zero since November 2010, and 2) a rate set to match the rate of inflation. Each semiannual inflation rate applies to all outstanding I Bonds for six months.

Obviously, I Bonds have lost a bit of their appeal. The time to buy your 2012 allotment ($10,00 limit per person, or $20,000 for a couple) was before the May 1 rate change.

I Bonds are unusual in that they pay the existing rate for six months, no matter when you buy them. So a purchase April 30 would pay 3.06% for six months (and then 2.2% for the next six months). A purchase May 1 would pay 2.2% for six months, then a rate to be determined on Nov. 1 for the next six months.