Continuing the discussion from For the income investors; I know some of you are here:
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Thanks for posting it. I missed the deadline.
So I-bonds have a fixed and composite rate, correct? What is the fixed rate? 9.62 was the composite rate. There is a Barron’s article saying the new rate is better, but I am not a subscriber: The New I Bond Rate is More Attractive Than the Old 9.6%. | Barron's
The current rate as of today is 6.89%; I am not sure why Barron thinks it is better; May be due to inflation rate coming down? IN any case, I added in Dec 21 and the in Jan 22 so, I cannot add any more money; But if there is anyone… now is the time; There is a huge rush to take advantage of the high rates; Treasuries is seeing record inflow 
My wife is like why don’t you buy 30 year i-bond; I was like, yeah I wish… but we don’t want inflation running at these levels for 30 years…
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If I’ve read correct - very possible I haven’t - that the 9.62 applied to principal for a 6 month period, and the for upcoming 6 month period someone who bought before 11/1 would get the same 6.89% someone buying today would get? I am not sure how the variable component works. Over time, that would track CPI-U. So if inflation gets under control over time, and it may keeping the 1 year, 5 year, and 30 terms for redemption milestones, the fixed rate could be a bigger factor?
I haven’t made a spreadsheet, but the .4% is up from 0% for the fixed portion. That’s all I can think of for the Barron’s article about why the new series might be better.
https://treasurydirect.gov/files/savings-bonds/i-bond-rate-chart.pdf seems to indicate that’s the case.
It’s interesting that they raised the fixed rate portion to 0.4%. That means that despite the higher initial rate last period (pre-Nov), new I-bonds will do better overall at maturity. I suppose that in 5 years, we will all have to consider redeeming our old I-bonds (0%), and replacing them with I-bonds at a higher fixed rate (if it still exists at the time, and if possible due to purchase limits).
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Yes for the next 6 months it is 6.89%. I would say instead of focusing on base and variable, just focus on the total return you will be getting for the 6 month period.
I think you can buy 10K worth of bonds every year for yourself and additional 10K for your spouse and each child.
You can also get up to $5K of a tax return as an I-bond, as well.
And yes, total return is where the focus should be.
For those that bought before 11/1, they are getting 9.62% for the next 6 month. Then they will get 6.89% for the next 6 months after that. This is why it was important to get your $10K purchased and cleared before 11/1.
Are you sure it won’t be 6.49% for those old (pre 11/1/22) I-bonds with a 0% fixed portion of their rate?
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The fixed portion is permanent when you buy it. The 6.89% variable comes with a .4% fixed (with 9.62 it was 0%). I haven’t done the math to see what the expected outcome of .4% difference over the full term vs the initial 9.62% semiannual payment to see which compounds better.