The US Treasury Department announced a new interest rate for Series I savings bonds, set at 3.98% for purchases made between May 1 and October 31, 2025. This rate replaces the previous 3.11%.
Changes in Interest Rate
The new rate consists of a 2.86% inflation-based portion and a 1.10% fixed rate, which marks a decrease from previous levels. The fixed rate set in October was 1.20%.
Understanding Series I Savings Bonds
Series I savings bonds update their interest rates every May and November, combining a variable and a fixed rate into what’s called the composite rate. The variable portion responds to inflation and remains steady for six months after the bond is purchased.
Impact on the Economy and Investors
While the new rates are lower compared to the historical high of 9.62% in May 2022, they may still appeal to those planning to hold onto their bonds. Meanwhile, economic indicators released by the Commerce Department show a contraction of 0.3% in GDP in the first quarter of 2025, eliciting mixed reactions from experts.
With an eight-month period since October 2022, the foundation for understanding the changes in the financial market is being laid. Despite the reduction in interest rates, Series I savings bonds continue to be viewed as an effective investment tool.
