Treasury Slashes I Bond’s Fixed Rate To 0.2%

Summary

  • The I Bond’s fixed rate is falling from 0.5% to 0.2% for purchases through April 2020, a move that was expected after a year of declining interest rates.
  • Bad news? Disappointing, yes, but I Bonds will remain an attractive investment into 2020 as long as real yields on TIPS remain depressed.
  • Also, no change for the terms of EE Bonds. They’ll earn a lousy fixed rate of 0.1% but double in value in 20 years, for an effective return of 3.5%.

In response to deep declines this year in real interest rates, the U.S. Treasury announced today it is cutting the fixed rate for U.S. Series I Savings Bonds issued through April 2020 from 0.50% to 0.20%.

Read my full analysis on SeekingAlpha.com

About Tipswatch

Author of Tipswatch.com blog, David Enna is a long-time journalist based in Charlotte, N.C. A past winner of two Society of American Business Editors and Writers awards, he has written on real estate and home finance, and was a founding editor of The Charlotte Observer's website.
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