I would tend to agree.
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It fell to 0.0% as expected. No surprise there.
Is it time to cash out yet??
I never bought I-bonds because I don’t trust the CPI or government statistics in general. For the CPI there is a huge motivation for government statisticians to under-report inflation.
I would rather own gold or silver as an inflation hedge. Even better is having long term fixed rate debt. Inflation is a wealth transfer from creditors to debtors, so you want to have debt when inflation does come.
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Any updates or comments about ibonds? I usually buy some around this time of year.
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I bought the limit for myself and my SO in January this year.
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I also bought the limit and am planning to purchase $5,000 with the tax refund this year. Although I have an “entity” EIN for my solo 401(k), which allows for another $10,000 in annual purchases, I’ve resisted doing so because of the hassles of another account combined with possible complications should I pass on.
is this still good? love the tax deferral+ free for college deal
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Your income must be relatively low in order to take advantage of the tax exemption for college expenses. The modified AGI for singles and head of household is $97,350 and for married filing jointly is $153,550. However, a 3.5% interest bond for retirement is great to use as a self funded pension for people in middle age. I had resisted EE Bonds for a while but thanks to interest rates falling, bought $10,000 last year and $10,000 this year.
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Ahem… relative to what? 
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yeah. that’s considered too high for full stimulus check for instance… why I hate national “rich” stats.
High Cost Of Living areas with 2 income households. For example, HUD estimates in San Francisco HUD Metro the median family income as $143,125 for 2020: https://www.huduser.gov/portal/datasets/il/il2020/select_Geography.odn
And we do desire to be above median, right? 
Well, yeah, if you cherry pick isolated geographical areas. I sure you could find some neighborhoods where $500k income makes you the poor person on the block. And there are far more areas in the country where that $153k limit is 5x what the typical family earns annually.
Those income limits are for a national program. The national median income s $78,500. Double the median is not “relatively low”.
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Well, while I am not in SF proper I am well within the bay area so it isn’t cherry picking to me.
The question was “relative to what?” and I gave my answer. Not my fault that we have vast national differences stuffed into fixed nationwide numbers.
Approximately 82% of households make less than $153,500 /yr. It is not “relatively low” by any definition except the one you provided. Not sure what you mean by “we have vast national differences stuffed into fixed nationwide numbers”.
It’s natural to desire more, but it’s also good to have perspective and stay grounded.
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Looks like iBonds are likely to be 3.54% (0% base, 3.54% inflation) starting in May. So it looks I will be delaying my purchase till the end of May.
https://www.depositaccounts.com/blog/inflation-treasury-series-i-savings-bonds/
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You would be better getting them this week, then you know your first 12 months will be good rates. First 6 months will be 1.68%, then 2nd 6 months will be 3.54%. If you buy in May, you have no idea what 2nd 6 months will be.
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This article appeared a few days ago in the NY Times:
With Inflation Rising, Consider the Humdrum U.S. Savings Bond
Inflation has been rising, making more attractive what was formerly considered a humdrum investment: federal savings bonds.
Series I savings bonds — the I stands for “inflation”— are low-risk bonds that pay a fixed rate set for the life of the bond, plus a rate that varies based on inflation, as measured by the Consumer Price Index. The rate resets twice a year, in May and November.
The fixed rate on new I bonds has been zero for more than a year — not much to get excited about. But the annualized inflation rate is 3.54 percent for bonds issued from May through October.
That’s an eye-catching number, especially compared with rates on basic savings accounts and certificates of deposit insured by the Federal Deposit Insurance Corporation. The average interest rate on a savings account is 0.13 percent, with average rates of about 0.5 percent available through online banks, according to the website DepositAccounts.com.
It is true that buying an I bond now, with a zero base rate, means you may earn less if inflation falls and the bond’s variable rate falls along with it when rates reset. While no one can predict whether inflation will continue to rise, prices have been increasing as the economy rebounds from the pandemic — so hedging against further inflation may make sense.
“If inflation stays elevated, it’s a bit of a no-brainer,” said Andy Mardock, a fee-only financial planner in Bend, Ore., and a member of the National Association of Personal Financial Advisors.
Plus, even if the inflation rate drops, you’ll get back your initial investment — the face value of the bond when you bought it — when you eventually redeem it. The bonds also protect you against deflation: The overall rate on the bonds can never fall below zero.
“The earnings rate can’t go below zero, and the redemption value of your I bonds can’t decline,” the Treasury website says.
Savers bought I bonds totaling $127.6 million in May, compared with $13.4 million a year earlier, according to Treasury Department data analyzed by Ken Tumin, founder and editor of DepositAccounts.com. In addition to possible concerns about inflation, some of the sales in May could have been the result of this year’s delayed income tax filing deadline, Mr. Tumin said; bonds typically purchased with tax refunds in April may have been bought a month later. (Purchases of I bonds tend to spike in January of each year, the data shows, but the amount bought this spring was markedly higher than in January of this year and last year.)
There are some details about the I bonds to keep in mind.
First, there’s a limit on how much you can invest. You can buy up to $10,000 per year, per person, in digital I bonds through Treasury Direct, a website operated by the Bureau of the Fiscal Service, which is part of the Treasury Department. (Savings bonds can no longer be bought at bank branches.)
You can also buy an extra $5,000 in paper I bonds each year using your income tax refund. (Buying with a tax refund is the only way left to buy traditional, nonelectronic savings bonds).
A couple, then, could buy up to $30,000 in I bonds for themselves annually. They could also buy more to give to someone as a gift.
Another downside: You must hold a bond for 12 months. The government won’t redeem it earlier. So be careful before putting your entire emergency fund into I bonds, Mr. Mardock said — you can’t convert them to cash for a year.
“The catch is, it’s not as liquid as a savings account,” Mr. Tumin said.
And be aware that if you cash out before holding a bond for five years, you will have to pay back the last three months of interest. Even so, given that the bonds are currently paying a higher rate than other savings options, you’ll probably come out ahead even if you pay the penalty, Mr. Tumin said.
Here are some questions and answers about Series I savings bonds:
Yes. The minimum purchase is $25 for electronic bonds and $50 for paper.
To buy the bonds (unless you’re using a tax refund), you’ll need to create a Treasury Direct account and link it to your bank account. You can buy digital bonds in any amount, to the penny, as long as it’s over $25.
Paper bonds, bought at tax time, come in denominations of $50, $100, $200, $500 and $1,000.
Savings bonds aren’t sold through brokers, which is one reason some people aren’t familiar with them. There is no commission.
Savings bonds pay interest for 30 years. I Bonds were first issued in 1998, so the earliest bonds are still paying interest — some at rates as high as 7 percent, because the base rate was much higher two decades ago. So before redeeming older bonds, check their value. You can check the rate on an older bond on Treasury Direct.
No. Inflation-protected securities also aim to guard against inflation, but they work differently from savings bonds. TIPS have much higher purchase limits and may be bought and sold on the secondary market, unlike I bonds, which are held by the owner until redeemed.
Interest on I bonds is exempt from state and local taxes. You will owe federal tax on the interest earned, but you don’t have to pay it until you redeem the bond. And if you qualify based on your income, you may be able to avoid paying all or some of the federal tax on the interest if you use the cash from the bond to pay for college expenses.
Hmmmm. Interesting article. With inflation fixin’ to skyrocket, and given some assert it’s already happening, maybe it is time for me to add a few bucks to my I-bonds portfolio. I did a couple of buys some years back but have shied away in the past few years. Perhaps:
It’s time
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Is inflation fixin’ to skyrocket?
Look out!!! Drop that apostrophe, and you’ll be in FL before you know it.
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