I Bonds Rates December 2024
The December I bond composite rate is 3.11% (US Treasury).
The December I Bond Fixed Rate is 1.20%.
The December 2024 I Bond inflation rate is 1.90%.
Read on to decide if you’d like to continue buying I Bonds, or if you’d rather cash them out.
Also consider if and when you may want to swap out your existing I Bonds for new I Bonds at a higher fixed rate.
December I Bond Fixed Rate is 1.20%!
If you liked having I Bonds and matching inflation then you might love having I Bonds that beat inflation over the next 30 years. The current fixed rate of 1.20% is one of the best fixed rates in the past 21 years.
To consider whether you’re better off swapping to the new 1.20% fixed rate I Bonds view this video:
The December 2024 I Bond Inflation Rate is 1.90%
The current I Bond inflation rate is 1.90%. Any I Bonds that renew during November 2024 – April 2025 will get that inflation rate added to its existing fixed rate.
How is the I Bond composite rate determined?
The composite rate is a combination of the fixed rate and the semiannual inflation rate.
The fixed rate for I Bonds issued in December 2024 is 1.20%
The semi-annual inflation rate is 1.90%.
When you combine the two rates, and the additional inflation adjustment added to the fixed rate itself, you get the composite rate of 3.11%. Here is the exact math on the I Bond composite rate: [1.2% + (2 x 0.95%) + (1.2% x 0.95%)] = 3.11%.
What will the next I Bond Fixed Rate be?
The best I Bond Fixed Rate predictor I find comes from David Enna at TipsWatch.com.
As we get closer to May we will project the next I Bond fixed rate.
What will the next I Bond Inflation rate be?
The next I Bond inflation rate will be determined by the change in CPI-U from September 2024 – March 2025.
As we get closer to May we will project the next I Bond inflation rate.
How long do I get the current I Bond interest rate for?
This fixed rate stays with those I Bonds throughout the 30 years that they earn interest.
The current semiannual inflation rate of 1.90% will reset every 6 months following the purchase, or renewal, of your I bond.
When does my I Bond get the new rate?
Your I Bond will get the new rate on its own anniversary month, which comes in 6 month intervals.
Here are some examples of when you may have purchased I Bonds, its fixed rate and how its current rate will change at its renewal month.
| Purchase Date | Fixed Rate | Current Rate | Renewal Month | Next Renewal % |
| October 2022 | 0.0% | 2.96% | April 2025 | 1.90% |
| January 2023 | 0.40% | 3.37% | January 2025 | 2.30% |
| October 2023 | 0.90% | 3.87% | April 2025 | 2.81% |
| January 2024 | 1.30% | 4.28% | January 2025 | 3.21% |
| April 2024 | 1.30% | 4.28% | April 2025 | 3.21% |
| December 2024 | 1.20% | 3.11% | June 2025 | ?? |
How was the new I Bond inflation rate determined?
We are keeping a close eye on the latest CPI-U numbers, which you will see below determine the inflation rates for I bonds. The latest CPI numbers were released on December 11, 2024.
The current I Bond inflation rate is set at 1.90%.
CPI-U Data used to create I Bond Inflation Rate
| March 2024 CPI-U: | 312.332 |
| September 2024 CPI-U: | 315.301 |
| Nov ’24 – April ’25 Inflation Rate: | 1.90% |
Should I buy I Bonds?
If you’re buying I Bonds now it’s likely because of your desire to get the 1.2% fixed rate.
Buying now will get your 12-month clock ticking since you can not cash them in for 12 months.
Buying in April 2025 will give you more flexibility in that you can wait and see what the next inflation rate is going to be, and you can get a good idea of whether the next fixed rate might be higher or lower.
Here’s my thoughts on whether you should hold onto your I Bonds, cash them in, or swap them out for the higher fixed rate.
How does the current I Bond rate compare to historical rates?
When we compare the 6-month I Bond rates against 12-month Treasuries at the time we see that the 6-month I bond rate is an average of 1% lower.
At an initial rate of 3.11%, buying an I bond today gets roughly 1% less compared to the 4.26% 12-month Treasury Bill rate (December 20, 2024).
You could say that buying an I Bond right now is a ‘fair deal’ historically compared to 2021 & 2022 when I Bond rates were much higher than comparable interest rate products.
One big difference between a Treasury Bill and the I Bond is that you can get out of Treasury Bills before 12 months AND you don’t have to give up the prior 3 months’ interest if you cash out in the first 5 years. You could be subject to changes in the price of the Treasury Bill if you don’t hold it to maturity, however.
Another difference is that when you buy the I Bond you’re locking in that 1.2% fixed rate ABOVE inflation for up to 30 years.
What should I consider when buying I Bonds in December 2024?
You are required to hold I bonds for 12 months, yet you generally only know the rate you’ll get over the next 6 months.
There are 2 rates you need to keep in mind:
- The current rate for I Bond purchases is 3.11%
- Your renewal rate, which is based on the next inflation rate won’t be known until late April.
If you buy an I Bond now you will get 3.11% for 6 months, then you don’t know what it will be after that. It could even be 0% if inflation turns negative!
What if you’re considering cashing out your I bonds?
If you’re considering cashing out your I Bonds make sure you find the best time that gets you the most interest at my blog on When to Cash Out Your I Bonds.
What do I need to know about I Bonds?
An I bond is a U.S. Government Savings bond that carries a fixed interest rate, plus an additional inflation adjuster, so that you get an inflation-adjusted real rate of return. In a world of inflation worries and few inflation-adjusted investments, the I Bond is a great place to look for savers.
What are the details with an I Bond?
- You have to hold them for 12 months minimum. You can’t cash out before then.
- If you cash out between the end of year one and the end of year five, you lose your prior three months interest as a penalty.
- You can only buy $10,000 per person, per year, and you have to do it at TreasuryDirect.gov
- I bonds are a great place for part of your emergency fund money
Bonus: Listen to our podcast with savings bond expert David Enna from TipsWatch.com on I bonds: US Series I Savings Bonds Simplified
Why are I Bonds so interesting right now?
I Bonds were somewhat unknown until they started offering eye-popping yields, based on the inflation rate, in May 2021 with the 3.54% rate.
Then, in November 2021 I bond rates doubled to 7.12% and then 9.62% in May 2022! The last super-high inflation rate was 6.48% in November 2022, which also came with a 0.4% fixed rate.
Right now, the fixed rate of 1.20% is the most compelling reason to buy I Bonds. This fixed rate got to 1.30% in November 2023, and has stayed near this high ever since. These fixed rates haven’t been this high since October 2007.
I Bonds got famous for the high inflation rates in 2021 & 2022 – they may stay popular for new purchases based on the 17-year high fixed rates.
How do I Bonds work?
When the US Government announces the 6-month inflation rate, you’ll be earning double that amount for half the year. Most interest rates are quoted in annual terms, but I bonds are quoted in semi-annual 6-month terms.
To calculate the annualized rate and to compare it to other rates just double the 6-month inflation rate, add in the fixed rate and then add the fixed rate inflation adjustment by multiplying the two together and adding that in.
That last factor is quite small, so feel free to ignore it to get a rough sense of the current rate. To see the math on each factor go to Treasury Direct I Bonds Interest Rates.
The current composite rate of 3.11% is only earned for the first 6 months of your I Bond. Your December 2024 I Bonds purchase will turn your $100 into roughly $101.55 just 6 months later. This is a 3.11% annualized rate.
When do I get the next interest rate with I Bonds?
Six months after your purchase you’ll get the new six-month inflation rate, still get the same fixed rate from the start of your I Bond, and your money will grow by your new composite rate.
Your interest will be added every six months to the principal of your I Bond, and you’ll get the next 6 months interest applied to that new principal amount. This is called semiannual compounding.
You are required to hold I bonds for 12 months, and you only know what the next 6 months will bring for interest, but what’s the worst that could happen?
What’s the worst-case scenario when I buy an I Bond?
The worst-case scenario for purchases in December 2024 is you earn 3.11% interest for the 6 months after you buy your I bond, followed by 0%, if inflation turns negative.
You know then that you will get at least 1.55% over the next year, although likely higher than that. Inflation has only been negative 2 times out of the 54 semi-annual inflation rates – in May 2015 and May 2009.
This compares to close to 4.3% on 12 month Treasury Bills and CDs; however, 12 months from now you don’t know what those Treasury Bills and CDs would be renewing at.
You would know, with your I Bond, that if you purchase today you will get at least 1.2% above inflation. That fixed rate, giving you a return above inflation, is the big value in I Bonds right now.
While your current 12-month guaranteed rate doesn’t compare to other 12-month investments, you are guaranteed, that every 6 months your renewal rates will be 1.20% above inflation for the 30 year life of your I Bond.
What are the interest rates on investments that are similar to I Bonds?
(based on Bankrate.com and Federal Reserve Data from December 20, 2024)
Unlike most of 2021 and 2022, I Bond rates are now more in line with historical rates, and are a fair deal relative to 12-month Treasury Bills since their current yields are roughly 1% lower, and historically I bond rates have been 1% below Treasury Bill rates.
What should I do if I’ve already maxed out I Bonds purchases for 2024?
Wondering what to do if you’ve already maxed out your I Bonds purchases for 2024? You may want to look into the gift box method for buying more than $10,000 in I Bonds.
If you don’t want any more I Bonds, consider short-term Treasury Bills!
For guidance on buying Treasury Bonds and Treasury Bills check out our blog: Get More Interest From Buying Treasury Bonds and Bills (T-Bills) Through Treasury Direct.
How to Get Strategic with Your I Bonds Purchase
There are no partial months in I Bond world! When you are buying I Bonds it serves you best to buy towards the end of the month, and to sell towards the beginning of the month.
David Enna, author of Tipswatch.com suggests being even more strategic, “You can buy an I Bond near the last day of the month and get credit for a full month’s interest, so you can effectively cut the one-year holding period to 11 months and a day, but realistically, you may want to extend the holding period to 14-15 months.
If you lose the prior three months of interest by cashing in early and are unhappy with the new 6-month rate, you would want to hold on for the full higher interest period in months six to twelve and wait for another full three months of lower interest before cashing in after month fifteen.”
How to Take Action On Your Interest Rate Money
When saving your money over a 12-month time frame I Bonds are just one of many investments to consider. Zvi Bodie likes to call I bonds “America’s Best Kept Investing Secret.”
Consider your I bonds purchase not just for the short run, but also over the long run as part of a healthy emergency fund savings balance. To buy your I Bonds, go to TreasuryDirect.gov.
Bonus: Listen to the podcast with David Enna from TipsWatch.com for more in depth analysis on I bonds: US Series I Savings Bonds Simplified
Bonus: For guidance on buying Treasury Bonds and Treasury Bills check out our blog: Get More Interest From Buying Treasury Bonds and Bills (T-Bills) Through Treasury Direct.
More I Bonds Resources
- 9 Steps on how buy I Bonds by Jeremy Keil
- A Complete Guide to Investing in TIPS and I Bonds (2022) by David Stein with Money For the Rest of Us
- Podcast: US Series I Savings Bonds Simplified featuring David Enna from TipsWatch.com
- Treasury Direct: Series I Savings Bonds
- 3 Things You Should Know Before Choosing A Financial Advisor
- 7 Questions That Could Make or Break Your Retirement
- Free Retirement Video Course: Your 5 Step Retirement Income Plan
- Subscribe to Retirement Revealed on Google Podcasts
- Subscribe to Retirement Revealed on Apple Podcasts
Connect With Jeremy Keil:
- Mr. Retirement YouTube Channel
- LinkedIn: Jeremy Keil
- Facebook: Jeremy Keil
- LinkedIn: Keil Financial Partners
Disclosures:
This material is provided for informational purposes only and is not solely intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The views and strategies described may not be suitable for all investors.
They also do not include all fees or expenses that may be incurred by investing in specific products. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. You cannot invest directly in an index. The opinions expressed are subject to change as subsequent conditions vary. Advisory services offered through Thrivent Advisor Network, LLC.
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