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With the I Savings Bonds rate at 7.12%, I'm thinking about buying some. From my understanding:

  • You have to hold them for at least one year
  • If you cash them out before 5 years, you lose the previous three months of interest.

My question is, if you buy a fixed rate bond, do you get that same rate until you cash it out? For example, if I buy an I Savings Bond today, would I get that 7.12% every year until I cash out if I just hold it? Or, do you have to re-buy the bond every year?

Thank you.

Chris W. Rea
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Dev
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1 Answers1

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If you bought a fixed rate bond, you would receive that % coupon rate annually. However, series I bonds are not fixed rate, they are floating around a reference rate, the rate of inflation. They only change rate once every 6 months though, so if you bought one on the day the rate changed to 7.12%, you would be guaranteed 6 months of interest at a 7.12% annual rate. Anything beyond that is up in the air, with the only rate guarantee being that it will match the current rate of inflation at that time.

Series I bond FAQs

windwally
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