I Savings Bond Rate

I savings bonds are a very good investment for your retirement years, if you start investing early enough in your life. I savings bonds double in value at their maturity date in 20 years. The remaining 10 years, your bonds will continue to accrue interest. I savings bonds are protected against inflation, are a very low risk investment. When you retire you will need at least 70 percent of the income you had pre-retirement.

The Series I Savings Bond rate is set by the U.S. Treasury; the Secretary or the designee of the Secretary of the Treasury will set a fixed rate for the life of the bond. There are 30 years to final maturity, and whatever the interest rate was when the bond was purchased will be the rate of interest that bond will accrue for the life of the first 20 years. The interest rate for Series I Bonds is 3.36 percent from November 2009 to April 2010. There are two rating periods per year, so new I bonds purchased will have the interest rate set for the rating period in which the bond was purchased.

If you are interested in purchasing Series I Savings Bonds, you should pay attention to what the interest rate is for rating period in which you buy the bonds. For instance, May 1, 2009 the interest rate for I bonds was 0 percent. If you bought an I bond in the previous rating period your bond would earn 5.64 percent, but if you bought an I bond from May 1 to October 31, your bond wouldn't earn any interest at all for that 6 month rating period. Once the new interest rate is set by the U. S. Treasury, the I bond will begin earning interested.

The earning rate in I bonds is calculated by the fixed interest rate and the semiannual inflation rate. Even if the economy deflates, the I bond will never lose value. The Series I Bond may not grow very much, if the interest rate and the inflation rate are low, but you will never lose your investment. The inflation rate is set each rating period, and even when the rate of inflation is in the negative, the rate will never be less than zero.