Inflation Dips In March, I Bond’s Variable Rate Will Fall To 1.96% On May 1

Summary

  • At the May 1 reset, the I Bond’s variable rate will fall from 2.76% to 1.96%.
  • We don’t know yet what the new fixed rate will be. Will it rise to 0.1%? Still possible.
  • Should you buy I Bonds before May 1 to get the higher variable rate? Or hold out for the higher fixed rate? Tough call.

This decline in the variable rate sets up an interesting decision for I Bond investors: Buy before May 1 to get the 2.76% variable rate for six months, or wait until May 1 to see if the I Bond’s fixed rate – currently set at 0.0% – will rise to 0.1% (or higher).

>>Read my full analysis on SeekingAlpha.com

Also, I have updated my Tracking Inflation and I Bonds page with these new numbers.

And here are the May CPI indexes for TIPS.

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