By David Enna, Tipswatch.com
Just a heads up to readers: Right after 10 a.m. EDT Tuesday, the Treasury will announce the new composite rate for I Bonds issued between November 2022 and April 2023. Will the I Bond’s fixed rate go higher? We will find out … tomorrow.
Unfortunately, at that hour, I will be in a car heading down an interstate to a family-reunion vacation on Hilton Head Island, S.C. This reunion was rescheduled twice and unfortunately got moved to begin on November 1, the rate announcement day. Oh well …
I will post what I can from the car (I won’t be driving) as soon as I can tomorrow, then I will update that posting with more analysis later in the day.
Also tomorrow, we will get confirmation that the I Bond’s new variable rate will be an annualized 6.48% for six months for all I Bonds, no matter when they were issued. The fixed rate decision, however, is a great unknown. I have been saying the fixed rate should be boosted from 0.0% to 0.5%, but it could very well stay at 0.0% or go even higher than 0.5%.
In addition, we will learn if the Treasury will raise the fixed rate on Series EE Savings Bond from an embarrassingly low 0.1%, where it has been stuck since Nov. 1, 2015. The EE Bonds double in value if held for 20 years, creating an effective return of 3.53% a year. I doubt the Treasury will change the 20-year doubling term. Seems highly unlikely.
Wildly unlikely would be a Treasury decision to allow a higher purchase limit on Savings Bonds, currently $10,000 each for I Bonds and EE Bonds per person, per year. That would be huge news, but there is no indication this is coming.
See you tomorrow.
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David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. The investments he discusses can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.