Treasury announces new inflation protected bonds paying 4.28 percent.

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  • Series I bonds, an inflation-protected and nearly risk-free asset, will pay 4.28% through October 2024, the U.S. Department of the Treasury announced Tuesday.
  • The latest I bond rate is down from the 5.27% yield offered since November.
  • Short-term investors have more competitive options for cash. But the fixed rate could still appeal to long-term investors, experts say.

Series I bonds will pay 4.28% annual interest from May 1 through October 2024, the U.S. Department of the Treasury announced Tuesday.

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Linked to inflation, the latest I bond rate is down from the 5.27% annual rate offered since November and slightly lower than the 4.3% from May 2023.

Current I bond owners will also see their rates adjust, depending on when they bought the assets. There’s a six-month timeline for rate changes, which begins on the original purchase date.

www.cnbc.com/2024/04/30/treasury-series-i-bond-rate-is-4point28percent-through-october-2024.html

Inflation-protected bonds, also known as Treasury Inflation-Protected Securities (TIPS), are bonds issued by the U.S. Department of the Treasury. These bonds are designed to protect investors against inflation by adjusting their principal value based on changes in the Consumer Price Index (CPI), a measure of inflation. As inflation rises, the principal value of TIPS increases, providing investors with a hedge against the erosion of purchasing power. Additionally, TIPS pay interest twice a year, with the interest payments also adjusted for inflation.

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