the new composite rate for I Bonds purchased between now and April 30 is 6.06%. The current composite rate is 4.28%.
As Mel noted, this is huge compared to
2.5% Prime MM
4.2% ST Bond
4.25% Total Bond Market
Considering they’re risk-free, tax-deferred, free from state and local taxation, and can possibly be used tax-free for qualifying education expenses, I Bonds look like a no-brainer at the current 1.2% real. Of course, that 1.2% fixed is most likely not going to be available come May 1st, so I suggest folks load up on their allotment before the end of April.
The composite rates, with the various fixed rate bonds, are as follows:
The big question is what is the treasury going to do with the fixed rate from May 1? I suppose they can set it to zero and still get a “competitive” 4.86%. But I think 0% might not sound acceptable to the less financially inclined. I suspect the fixed rate next month will be set to 0.2% to 0.5%.