But you only have a short window, until the end of October, to take advantage of the price. Savers who want to lock in that rate for an additional six months have until Friday, October 28 to make their bond purchase to ensure they are issued by the October 31 deadline.
Here’s why this downtime is so important.
There are two components to Bond I yield: a fixed rate and an inflation-adjusted rate. The fixed rate of return and the semi-annual inflation rate are announced by the Treasury at the beginning of May and November each year.
While the fixed price stays the same for the entire 30-year term of the bond (which is currently zero), the inflation rate is adjusted every six months based on changes in the CPI for all urban consumers.
Although inflation remains at historically high levels, the latest numbers show a slight slowdown, according to the Newly released data From the Bureau of Labor Statistics.
Some indicators declined in September, including those for used cars, trucks and clothing. Increases in consumer prices were offset by a 4.9 percent decline in the gasoline index. Therefore, the inflation index portion of the first bond is likely to see a rate cut in November.
However, investors who buy I bonds before November 1 will still receive 9.62 percent for the first six months they hold the bond. But you must get a confirmation email to confirm the purchase of your I warranty by 11:59:59 PM ET on October 28 to make sure the price is fixed.
Here are some things you need to know about buying I bonds.
– To purchase an electronic bond, you must first create an account on TreasuryDirect.gov.
Individuals can purchase up to $10,000 of bonds in a calendar year. For married couples, each pair can purchase up to a maximum of $10,000.
Don’t buy I bonds with money you think you will need soon. This is not the place to put the money you need to access in case of emergency expenses such as a major car repair. This money should remain in your savings account. You must hold an I bond for 12 months from the date of issue before it can be redeemed.
If you cash the bond in less than five years, you lose the interest of the last three months. Once your warranty reaches five years, there is no interest penalty if you cash it out.
– If you have not created a TreasuryDirect account before, take a guided tour of the website and be sure to read the directions carefully to minimize any problems. People who are having problems will find it difficult to get to a live person for help. Wait times for assistance at 844-284-2676 can be long. (Calls are accepted 8 a.m. to 5 p.m. ET, Monday through Friday.)
– Due to the issues some people have had when creating a TreasuryDirect account, don’t be put off. Get it now. Don’t wait until October 28. Savers are looking for information or help with an issue with an I bond that has flooded TreasuryDirect, causing much longer than usual waiting times.
– If you are having trouble creating an account online, you will need to sign papers from your bank. If that happens, it’s unlikely that you’ll set the deadline on October 28.
I initially tried to buy an I bond in June. TreasuryDirect said it had difficulty verifying the information it provided. I was not told why there was a problem.
An automated email from TreasuryDirect said: “We have not been provided with any information regarding issues related to account verification.”
Due to issues verifying my information, I had to complete an account authorization form and mail it to the Treasury location in Minneapolis. “The average approval takes 10 to 15 days but may take longer depending on the volume of forms we receive,” the first email from TreasuryDirect said.
A few weeks after mailing the form out, I received an email acknowledging that the Treasury had received my form and that the approval process could take up to 13 weeks to review and process. It was good that they were able to live up to my expectations. Two weeks later, I received another email from TreasuryDirect stating that the suspension on my account had been removed, and I could make my bond purchase.
If you’re having trouble setting up a TreasuryDirect account on the first try, you’re unlikely to be able to meet the October 28 deadline to take advantage of the 9.62 percent rate. There is not enough time to navigate the verification process.
But with inflation still rising, bonds will continue to pay out significantly more than a savings account or certificate of deposit even after the rate reset in November. So don’t give up if you run into an obstacle in the process.