But you only have a short window, until the end of October, to take advantage of the rate. Savers who wish to lock in this rate for another six months have until Friday, October 28 to make their I bond purchase to ensure it will be issued by the October 31 deadline.
Here’s why this deadline is important.
There are two components to the yield of an I-bond: a fixed rate and an inflation-adjusted rate. The fixed rate of return and the semi-annual inflation rate are announced by the Treasury Department in early May and November each year.
While the fixed rate stays the same for the life of the 30-year bond (and is currently zero), the inflation rate adjusts every six months based on changes in the index consumer prices for all urban consumers.
Although inflation is still at historically high levels, the latest figures show a slight slowdown, according to recently published data from the Bureau of Labor Statistics.
Some indexes fell in September, notably those for used cars and trucks and clothing. Consumer price increases were partially offset by a 4.9% decline in the gasoline index. It is therefore likely that the inflation index part of Bond I could see its rate fall in November.
However, investors who buy I bonds before November 1 will still benefit from the 9.62% rate for the first six months they hold the bonds. But you must receive your confirmation email for your I Bond purchase by 11:59:59 p.m. EST on October 28 to ensure you lock in the rate.
Here are some things you need to know about buying an I Bond.
— To buy an electronic I-bond, you must first create an account on TresorDirect.gov.
— Individuals can purchase up to $10,000 of I bonds in a calendar year. For married couples, each spouse can purchase up to the $10,000 limit.
— Don’t buy an I bond with money you think you’ll need soon. This is not the place to put the funds you need for urgent expenses such as a major car repair. These funds must remain in your savings account. You must hold an I bond for 12 months from the date of issue before it can be redeemed.
— If you redeem the bond in less than five years, you lose the last three months of interest. Once your bond I is five years old, there is no interest penalty if you cash it.
– If you have never created a TreasuryDirect account before, follow the guided tour on the website and be sure to read the instructions carefully to minimize problems. People who are having trouble will find it difficult to reach a live person to help them. Wait times for help at 844-284-2676 can be long. (Calls are accepted 8:00 a.m. to 5:00 p.m. Eastern Time, Monday through Friday).
— Given the problems encountered by some people to open a TrésorerieDirect account, do not delay. Do it now. Don’t wait until October 28. Savers looking for information or help with a problem with I bonds flooded TreasuryDirect, causing much longer waits than usual.
— If you are having difficulty creating an online account, you will need to have documents signed by your bank. If this happens, you are unlikely to meet the October 28 deadline.
I first tried to buy an I bond in June. TreasuryDirect said they had trouble verifying the information I provided. I was not told why there was a problem.
“We are not receiving any information related to account verification issues,” said an automated email from TreasuryDirect.
Due to the issues verifying my information, I had to fill out an account authorization form and mail it to a treasury site in Minneapolis. The first email from TreasuryDirect stated that “average approval takes 10-15 days but may take longer depending on the volume of forms we receive”.
A few weeks after submitting the form, I received an email confirming that the Treasury had received my form and that the approval process could take up to 13 weeks for review and processing. It was good that they managed my expectations. Two weeks later I received another email from TreasuryDirect stating that my account suspension had been removed and I could make my I Bond purchase.
If you’re having trouble setting up a TreasuryDirect account on your first try, it’s unlikely you’ll be able to meet the October 28 deadline to take advantage of the 9.62% rate. There just isn’t enough time to navigate the verification process.
But with inflation still high, I bonds will continue to yield far more than a savings account or certificate of deposit, even after rates reset in November. So don’t give up if you face any problem in the process.