How much interest are I bonds paying? This is a common question among investors looking to understand the current yield on these popular savings bonds. I bonds, or inflation-indexed savings bonds, are issued by the United States Treasury and are designed to protect investors from inflation. The interest rate on these bonds is variable and adjusted twice a year, making it essential to stay informed about the current rates.
I bonds offer a unique combination of fixed and variable interest rates. The fixed rate remains constant for the life of the bond, while the variable rate adjusts every six months based on the Consumer Price Index (CPI). This feature makes I bonds an attractive option for investors seeking a balance between stability and potential growth.
As of the latest update, the interest rate on I bonds is as follows:
– Fixed rate: 0.10%
– Variable rate: 1.82%
The total interest rate, which is the sum of the fixed and variable rates, is 1.92%. This means that for every $100 invested in an I bond, you can expect to earn $1.92 in interest over the first six months. The interest is compounded semi-annually and is added to the bond’s principal.
It’s important to note that the interest on I bonds is subject to federal income tax but not state or local taxes. Additionally, the interest is exempt from state and local income tax in most states. This tax advantage makes I bonds an appealing choice for investors looking to maximize their after-tax returns.
The interest rate on I bonds is adjusted every six months, so it’s crucial to stay informed about the current rates. To find out how much interest are I bonds paying, you can visit the U.S. Treasury’s official website or consult with a financial advisor. By keeping an eye on the rates, investors can make informed decisions about their investment strategy.
In conclusion, the current interest rate on I bonds is 1.92%, with a fixed rate of 0.10% and a variable rate of 1.82%. As inflation-indexed savings bonds, I bonds offer a unique combination of stability and potential growth, making them a valuable addition to any investment portfolio. Stay informed about the rates to make the most of your I bond investments.
