The Department of the Treasury building is seen in Washington, D.C. Photo: Daniel Slim/AFP via Getty Images
The Treasury Department announced Tuesday that new Series I bonds will pay a 6.89% annual interest rate for the next six months.
The big picture: This is the third-highest rate since the I bonds were first established in 1998, according to CNBC. The previous interest rate was 9.62%.
- Investors can get bonds with the new rate by purchasing I bonds before the end of April.
Why it matters: The Series I bond rate combines a fixed rate and inflation adjustment. The inflation rate adjusts every May and November.
- Series I savings bonds don't lose value and protect people from inflation.
- I bond purchases through Treasury Direct are limited to $10,000 for individuals per calendar year. Individuals can buy an extra $5,000 in paper I bonds through their federal tax returns.
The big picture: The Treasury Department sold about $166 million per month on average before 2022, per the Wall Street Journal. But the high rates inspired more people to buy.
- Buyers scooped up the 9.62% rate before the end of October, leading to at least $1 billion in bonds purchases last Friday, WSJ reports.
Go deeper: Bond market bets Fed will overdo it