The clock is running out on I bond’s record-high interest rate. As of Nov. 1, 2022, the current rate of 9.62 percent will drop. But you’ll need to purchase I bonds by Oct. 28 to take advantage of the current rate.
Released by the Treasury Department and backed by the federal government, Series I Savings Bonds provide a rate of return based on inflation. They’re a safe way to hedge against a volatile economy that protects your nest egg. But how do I bonds work, and what happens when the rate drops?
How I Bonds Work
I bonds earn monthly interest. The interest is compounded semiannually. This means that the bond interest rate, in this case, 9.62 percent, is applied to a new principal every six months. The new principal is the sum of the interest earned and the prior principal….