The U.S. Bureau of Labor Statistics released the September 2022 Consumer Price Index (CPI-U) inflation data last week, which increased by 0.215% over the past month.
As always, now is one of the best times to consider purchasing I Bonds. The reason for this is that we now know what the Rate of return for October 2022 I Bonds will be for both the first and second six month periods, which is important since I Bonds must be held for 12 months before they can be redeemed.
Using the CPI-U data from March 2022 (287.504) and September 2022 (296.808) (courtesy of inflationdata.com), we can calculate the variable rate for the second 6 month period for October 2022 issue I Bonds.
That means these bonds would earn the current rate of 9.62% (using 0% fixed & 4.81% variable) for the first 6 months and 6.48% (combined 0% fixed & 3.24% variable) for the second 6 months. In the current interest rate environment, an October I Bond purchase is VERY attractive when compared to something like the 12 month CD @ 3.85% APY deal currently being offered at Banesco USA.
In my opinion, I would buy in October to lock in the outstanding 9.62% rate (the highest ever!) for the first six months along with the 6.48% for the second six months. I would also consider following that up with another purchase in April 2023 once the March 2023 CPI-U numbers are released.
