But you only have a short period, until the end of October, to take advantage of the rate. Savers who want to hold that rate for another six months have until Friday, October 28 to make their I-bond purchase to ensure it is issued before the October 31 deadline.
This is why that shutdown period is important.
The yield for an I-bond has two components: a fixed rate and an inflation-adjusted rate. The fixed return and the half-year inflation are announced by the Ministry of Finance at the beginning of May and November each year.
While the fixed rate remains the same for the 30-year bond’s maturity (and is now zero), inflation adjusts every six months based on changes in the consumer price index for all urban consumers.
Prices rose in September and will put heavy interest rates in the future
While inflation is still at an all-time high, the latest numbers show a slight slowdown, according to recently released data from the Bureau of Labor Statistics.
Some indices fell in September, including those for used cars and trucks and clothing. Consumer price increases were partially offset by a 4.9 percent drop in the gasoline index. So it is likely that the inflation index portion of the I bond could see a price decline in November.
However, investors who buy bonds before Nov. 1 will still receive the 9.62 percent rate for the first six months they hold the bonds. However, you must receive your I-bond purchase confirmation email by 11:59:59 PM Eastern Time on October 28 to ensure you lock in the price.
Here are some things to know about buying an I-bond.
— To purchase an electronic I-bond, you must first create an account with TreasuryDirect.gov.
— Individuals can purchase up to $10,000 worth of I-bonds in a calendar year. For married couples, each spouse can purchase up to the $10,000 limit.
— Don’t buy an I-bond with money you think you will need soon. This is not the place to set aside money that you will need in case of an emergency, such as a major car repair. That 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 in the bond in less than five years, you will lose interest for the last three months. Once your I-bond is five years old, there is no interest penalty if you cash it.
This important government bond pays a high interest rate. Here’s how to buy it.
— If you have never set up a TreasuryDirect account before, please take the tour of the website and read the directions carefully to minimize any problems. People who are having trouble will find it difficult to reach a living person to help. Wait times for assistance on 844-284-2676 can be long. (Calls are taken from 8 a.m. to 5 p.m. Eastern time, Monday through Friday).
— Don’t procrastinate, given the difficulties some people have had setting up a TreasuryDirect account. Finish it now. Don’t wait until October 28. Savers seeking information or assistance in resolving a problem over I-bonds have flooded TreasuryDirect, causing wait times to be much longer than usual.
— If you are having trouble setting up an online account, get the paperwork signed by your bank. If that happens, you probably won’t meet the October 28 deadline.
I initially tried to buy an I bond in June. TreasuryDirect said it was having trouble verifying the information I provided. I was not told why there was a problem.
What you need to know about the inflation index bonds that pay 9.62 percent?
“We’re not getting any information regarding account verification issues,” said an automated email from TreasuryDirect.
Because of the issues verifying my information, I had to fill out an account authorization form and send it to a Treasury site in Minneapolis. The first email from TreasuryDirect said, “the average approval takes 10-15 days, but could be longer based on the number of forms we receive.”
A few weeks after I emailed the form, I received an email confirming that Treasury had received my form and that the approval process could take up to 13 weeks for review and processing. It was good that they met my expectations. Two weeks later, I received another email from TreasuryDirect saying that my account had been deducted and that I could buy my I-bond.
If you run into trouble setting up a TreasuryDirect account on your first try, it’s unlikely you’ll be able to meet the October 28 deadline to take advantage of the 9.62 percent rate. There just isn’t enough time to navigate the verification process.
But with inflation still high, I-bonds will continue to pay significantly more than a savings account or certificate of deposit, even after interest rates reset in November. So don’t give up if you hit a snag.