The new rate for I bonds is still great for savers

It’s not every day bonds spark the kind of investor frenzy often on display on Wall Street or with cryptocurrency enthusiasts.

But that’s where we were a week ago Friday, as thousands of people crashed a Treasury Department website in the race to beat a midnight deadline.

People scored nearly $1 billion in I bonds on TreasuryDirect that day, locking in 9.62% for six months. And while that stunning rate is no longer available, the new one is still great.

As of Nov. 1, Series I savings bonds will pay 6.89% for six months. That’s much higher interest than a savings account, which on average commands a scant 0.16%, according to Bankrate’s Nov. 1 survey. And while many online financial institutions can do better, their accounts are still just paying 2 to 3%.

To purchase an electronic I bond, you must establish an account at

On Oct. 28, nearly 100,000 accounts were created and $979 million in I bonds were purchased, with the overwhelming majority of buyers snagging the 9.62% rate, according to a Treasury Department official.

That’s 14% of the $6.9 billion in savings bonds the department sold in all of October.

Here’s what to know about this little-known government-backed bond.

Why have people locked to I bonds?

Investing means risk. The stock market has been all over the place — up, down, way down — so people are looking for a safe place to park their cash.

Year to date, the S&P 500 is down 19% and the Dow Jones industrial average is off 10%, according to Bloomberg. The tech-heavy Nasdaq has dropped by 30%.

After years of pitiful interest on savings and checking accounts, I bonds, backed by the federal government, are a beacon of financial security.

From November 2021 until the end of October, the Treasury Department sold more than $35 billion in electronic savings bonds.

That’s a staggering amount of cash people were transferring from their savings and checking accounts — and in stark contrast with the financial situation of other Americans struggling to deal with high inflation. It shows there are many Americans who have money to spare, especially since you can’t sell an I bond for 12 months.

The typically obscure I bonds have resonated with investors because they address two of their biggest concerns right now, said Christine Benz, director of personal finance and retirement planning for Morningstar and co-host of the podcast “The Long View.”

“They offer safety in a year in which both stocks and bonds have fallen, and they help preserve purchasing power in an inflationary environment,” Benz said.

How long will the bonds pay 6.89%?

The rate is good until April 30, 2023.

If you buy an I bond, the rate applies for the first six months after the issue date.

Can I still get the higher rate if the website kept kicking me out?

The Treasury Department had been warning people for weeks that the interest in I bonds might delay purchases.

Even if you waited until the last minute and couldn’t make your purchase, it’s not your fault. TreasuryDirect is an antiquated site in need of an overhaul. The site also crashed in May, when the 9.62% rate was announced.

How much in I bonds can I purchase?

You can buy an I bond for any amount from $25 to $10,000. You can specify a specific amount to the penny. So you can buy an I bond for $49.99.

Be careful not to exceed the $10,000 limit per calendar year for electronically purchased I bonds. If your purchase is rejected, it can take weeks to get your money back.

But if you’re expecting a big tax refund next year, you could use it to purchase an additional $5,000 in paper I bonds, bringing the possible I bond total to $15,000 per individual.

To buy paper savings bonds, you use IRS Form 8888.

Is it still worth buying I bonds?

Yes, the current rate still beats other conservative options.

But don’t confuse the safety of I bonds with the need for liquidity, Benz said.

“I bond investors can’t redeem their bonds within the first 12 months, and if they cash in before five years have elapsed, they’ll forfeit three months’ worth of interest,” Benz pointed out. “But I bonds can be an excellent fit for safe reserves that investors don’t need ready access to.”

Singletary is personal finance columnist for the Washington Post.

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