I Bond Rates Get Crushed
One year ago, our team published this Marketmail:
#1 of the 6 Things read “While the current interest rates are very high, they are only guaranteed for 6 months. Then the rate resets. And it can easily reset much lower”
- In May 2022, the I Bond rate was 9.62%.
- This week, the rate reset down to 4.30%.
- And we would not be shocked if it resets down below 2.50% six months from now.
Since there is a penalty for exiting an I Bond prior to the end of 5 years, all those dollars which chased the 9.62% rate 1 year ago are likely staring at 4 more years of this.
I Bonds were the business media darlings 1 year ago. They couldn’t write enough articles extolling the virtues of I Bonds. And most of those articles didn’t warn that this was the most likely outcome.
Now? Crickets. Nothing.
Authors: Rick Wagner & Keith Wagner
Source: The U.S. Treasury Department
The views expressed herein are those of the author and do not necessarily reflect the views of Raymond James & Associates or its affiliates. All opinions are subject to change without notice. Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results.
The investments listed may not be suitable for all investors. Raymond James & Associates recommends that investors independently evaluate particular investments, and encourages investors to seek the advice of a financial advisor. The appropriateness of a particular investment will depend upon an investor's individual circumstances and objectives.
The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions.
