But … no clarification yet on delivery of gift-box purchases.
By David Enna, Tipswatch.com
The U.S. Treasury just announced a 1.20% fixed interest rate for the Series I Savings Bond, creating a new six-month composite rate of 3.11% for purchases from November 2024 through April 2025.
No surprises there. This is exactly what I was predicting in my preview article posted earlier this week.
At this point, it appears the Treasury is holding the annual purchase cap at $10,000 per person per year. But it has not yet posted the full news release on the rate change. That could be coming tomorrow.
Nov. 1 update: Here is the Treasury announcement, which confirms the fixed and composite rates.
In addition, Treasury has issued no clarification on delivery of I Bonds held as gift-box purchases. In a recent email, TreasuryDirect had asked investors to deliver those gifts “as soon as possible.” The site continues to say this:
Savings bonds you purchase as gifts aren’t included in your annual limit. The purchase amount of electronic savings bonds you transfer, deliver as gifts, or de-link to another TreasuryDirect account holder is applied to the annual purchase limit of the recipient. It is applied in the year the bonds are delivered to the recipient’s account.
In recent days, some callers to TreasuryDirect have received advice to 1) go ahead and deliver all gift-box savings bonds to recipients, and 2) face a temporary ban on future purchases because of those deliveries. The still-active statement from the Treasury’s Research Center contradicts that feedback.
So … we are still awaiting clarification. It could be that changes are coming January 1, so we may need to wait for detailed information.
The I Bond rate reset
The interest rate on a Series I Savings Bond changes every six months, based on inflation. The rate can go up, or as in this case, down. The overall rate is calculated from a fixed rate and an inflation-adjusted variable rate. The fixed rate never changes. The variable rate is reset every six months and so is the composite rate.
The fixed rate was set at 1.20%, which is in line with the formula the Treasury appears to have been using for a decade: Applying a ratio of 0.65 to the six-month average of the real yields of the 5-year Treasury Inflation-Protected Security. The rate of 1.20% was consistent with my forecast:
The fixed rate is always set to the 1/10th decimal point, so variations in the ratio reflect rounding. But the 5-year TIPS yield has been a good forecast tool.
The variable rate was based on six months of inflation data from April to September 2024. The increase was 0.95%, which is doubled to determine the six-month, annualized variable rate of 1.90%.
You can view the history of I Bond variable rates and fixed rates on my Q&A on I Bonds page. Also, you can see historical inflation data on my Inflation and I Bonds page.
The composite rate doesn’t simply combine the two rates, but uses a formula to reflect potential compounding during the six-month term. The end result was 3.11% instead of the 3.10% you’d get from simple addition.
The new six-month, annualized composite rate for purchases through April 2025 will be 3.11%, down from 4.28% for purchases through October. For holders of recent I Bonds with a fixed rate of 1.3%, the composite rate will be 3.21%. If you are holding an I Bond with a fixed rate of 0.0%, the new six-month composite rate will be 1.90%.
While those rates are lower than you can find on a 4-week Treasury bill (currently 4.87%), an I Bond with a fixed rate of 1.2% or 1.3% remains attractive, in my opinion. It will out-perform official U.S. inflation by more than 1.0%, with total safety, tax-deferred interest, and a flexible maturity date.
If your investment timeline is relatively short-term, go with T-bills. I Bonds are better used as a medium- to longer-term cash-equivalent investment.
EE Bonds
Also today, The Treasury set the fixed rate for the Series EE Savings Bond at 2.60%, down 10 basis points from the current 2.70%. The doubling period remains at 20 years, meaning the EE will earn 3.53% annually if held for 20 years. That rate is well below the 4.60% yield of a 20-year Treasury, meaning EE Bonds will be largely ignored unless short-term savings rates fall below 2.60% before April.
• Confused by I Bonds? Read my Q&A on I Bonds
• Let’s ‘try’ to clarify how an I Bond’s interest is calculated
• Inflation and I Bonds: Track the variable rate changes
• I Bonds: Here’s a simple way to track current value
• I Bond Manifesto: How this investment can work as an emergency fund
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Follow Tipswatch on X (Twitter) for updates on daily Treasury auctions and real yield trends (when I am not traveling).
Feel free to post comments or questions below. If it is your first-ever comment, it will have to wait for moderation. After that, your comments will automatically appear. Please stay on topic and avoid political tirades. NOTE: Comment threads can only be three responses deep. If you see that you cannot respond, create a new comment and reference the topic.
David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. I Bonds and TIPS are not “get rich” investments; they are best used for capital preservation and inflation protection. They can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.
Treasury Inflation-Protected Securities 
Would you consider duplicating your X postings on Threads for those of us who may want to move away from X? Thanks.
I have a Threads account, but after using it for awhile, the effort didn’t seem worth it. I totally understand if you don’t want to use X, however.
I have heard good things about Bluesky.
I don’t want to deliver my gift bonds immediately—one is a “pre purchase” of my youngest grandson’s college graduation gift, which would not be delivered until his graduation in May, 2026. If this is true, it will be interesting to see what penalties they assess for failure to deliver.
Can you tell me how to determine the new rates for Patriot, EE bonds, purchased August 2002?
Thank you!!
Doug Smith
The Treasury press release indicates the interest rate is 3.62% for the next semiannual period, which for you probably begins February 1.
The official press release announcing the new rates is out, but unfortunately it offers no information about gift box purchases.
https://treasurydirect.gov/news/2024/release-11-01-rates/
If they allow no limit on gift deliveries, I’m going to be jealous I didn’t conspire with multiple relatives to load up on those 1.3% ibonds. At least 1.2% for those of us waiting for 2025 is not bad, and could even be a cap raise. If they are halting the gift purchase option, I think the “fair” way to do it would have been allow them to be delivered under the same terms and restrictions as before, none of this “deliver NOW!” frenzy. New purchases subject to new rules if any changes. Otherwise I guess we can still load up on 1.2% gifts if we like taking chances…
I’ve been watching the reports, here and on the Bogleheads forum, from all the people who’ve recently had telephone contact with TreasuryDirect staff about the gift box issue.
I myself needed to call TD a few days ago, about another matter (a paper-to-electronic I Bond conversion that had been in limbo for a long time, so I just wanted to make sure it was due to the usual work backlog and not to any specific problem).
And afterwards I thought about how nice–and unusual–it is to have “help” contact with someone who (1) is an actual human being instead of a voice track or bot or live-chat thing; (2) is located in the United States; and (3) is courteous, pleasant, and eager to be helpful if possible (and I’ve never had any contact with TreasuryDirect that was otherwise).
I’ll take that over the customer “service” notions of a lot of other businesses I have to deal with.
So with the new lower variable rate, will February 1 of 2025 be the optimum date to cash out of any 0% fixed I Bonds, held less than five years, to minimize the penalty?
Depends on what month you acquired them. Each purchase month has a different “lag” to new rates
Just called Treasury Direct, only 1 minute wait. she was nice, but in the dark. She hinted at the Gift bond delivery being discontinued, but could not provide details or clear confirmation. Only that there will be changes. With my questions, there is no indication that your going to be banned from activity in 2025 if you exceed the 2024 limit due to gift bond delivery. She was 100% positive that TD wants you to deliver your gift bonds right away…….. They will provide clarification on the “Changes” , but who knows when. Patience grasshopper.
Partner and I made our first gift box purchase 10/20/24 and today (10/31/24) we received our official email. I had thought maybe it was sent to long-term gift box holders only, but nope. Hanging tight for the moment, hoping for more clarification. But if none is forthcoming, I may deliver two years’ worth with “you told me to” as a defense if needed.
I did the gift box purchases on 10/29/24. I wouldn’t complain if they send me the email to deliver these gifts sooner.
Yes it is disturbing that some of your readers called TD and were told to deliver all gift bonds right now with no penalties or punishment, then Kaleidoscope spoiled the party by saying that TD told him if he exceeded the limit in 2024, he would receive a harsh penalty of being banned from purchases or delivery of gift bonds in 2025. Will find out sooner or later. If we do get the one year penalty, will do better with T-Bills for the year anyway.
So, based on the contradictory information from TD, what is the consensus opinion at the current time? Should we deliver eligible bonds in our gift box today or wait until the dust settles? Any risk in waiting?
I delivered mine this week, two sets. I had planned to deliver one set in January anyway, and the other in January 2026. The only potential downside is that the gift-box opportunity may be going away. I also don’t think there is a risk in waiting, except if you wait until January that may eliminate the possibility of the recipient purchasing additional I Bonds, according to current rules.
Good call on the fixed rate, David. I miss the days when 3% was the normal fixed rate, back in the early 2000s. I recall buying $30,000 I-bonds at a bank (of all places!). I think I bought some I-bonds back then using my credit card.
The 2nd wave of emails to deliver from the Gift Box has washed out of TD. I got mine today.
1 of my gift box I bonds just became deliverable today (5 days)…and I just got the email stating to deliver it ASAP
I completed a gift box purchase yesterday just before the rate reset. If I receive the same email in the next five business days I plan to deliver the bonds immediately.
Yes, I delivered bonds I purchased in wife’s gift box in October rather than Jan 2025. I received / purchased 14,000 I bonds in my account in 2024. Think I’ll be in the same position as if I waited until Jan 2025 to deliver. I’ll still be able to buy 6,000 in 2025.
David, Congratulations for predicting the fixed rate. That and the rumbles of gift-box changes should convince most people to wait until January 1 for any further purchases. I’m interested in seeing Treasury’s reports of issuances for November and December.
Jim @IwasRetired