So there is confusion about the question on todays podcast Can the interest on your ibond ever be less that the fixed rate currently 1.3 percent ? And my answer was YES So just to be clear Here is the answer from David at my fav go to ibond site “To get the actual rate of interest (the composite rate) the Treasury combines the fixed rate and the inflation rate. The combined rate will never be less than 0.0%. However, the combined rate can be lower than the fixed rate. If the inflation rate is negative, it can offset some of the fixed rate. If the inflation rate is so negative that it would take away more than the fixed rate, the I Bond pays zero interest. But it cannot go below zero. This means that I Bonds are protected against deflation.” So has this ever happened? Yes! The variable rate has gone negative twice in the history of I bonds (for a six month period starting in May of 2009 and again in May of 2015 deleting the fixed rate. Another explanation from David L one of our community members Technically the 1.3% is forever, it’s just that the variable rate could potentially go negative. Most of the time you’ll get 1.3% plus variable%, but it could (rarely/temporarily) be 1.3% MINUS the variable %. So I hope that clears things up Also the other website to find your interest etc is EYEBONDS.INFO

Posted by Suze at 2023-11-09 17:00:59 UTC