Updated May I-Bond Rate Forecast: Should you purchase I-Bonds in April or May?

by | Apr 21, 2024 | Invest During Inflation

Updated May I-Bond Rate Forecast: Should you purchase I-Bonds in April or May?




As some of you know, March inflation numbers (CPI-U) came in earlier this week & they were even higher than what we & the market had expected! Watch on today as I talk about:
– the latest TIPS real yields
– our updated May I-Bond rate prediction &
– how things might play out overall for I-Bonds in May

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WATCH NEXT
How To Build A Bond Ladder:
May I-Bond Fixed Rate Formula?

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With the month of May quickly approaching, many investors are wondering whether it is the right time to buy I-Bonds. The interest rates for I-Bonds are set to change in the month of May, and this has sparked speculation about whether investors should buy bonds in April or wait until May to take advantage of potentially higher rates.

The current interest rate for I-Bonds is 1.68%, a rate that has remained steady since November of last year. However, the rate is adjusted twice a year in May and November based on changes in inflation. The rate for May will be based on the inflation rate from September 2020 to March 2021.

Financial experts and analysts have been predicting that the I-Bond rate for May could potentially be higher than the current rate, due to rising inflation and increased government spending. Inflation has been on the rise in recent months, reaching its highest point in over a decade. This could lead to a higher I-Bond rate in May, making it a more attractive investment for those looking for a safe and reliable way to grow their money.

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Investors who are considering buying I-Bonds may want to consider purchasing them in April before the rate changes in May. By buying bonds now, investors can lock in the current rate of 1.68% before it potentially increases in May. This could result in higher returns over the life of the bond, as the interest is compounded over time.

However, it is important to note that predicting interest rates is not an exact science, and there is always a degree of uncertainty involved. While many experts are predicting a higher rate in May, there is no guarantee that this will be the case. Investors should carefully consider their financial goals and risk tolerance before making any investment decisions.

Overall, the decision of whether to buy I-Bonds in April or May ultimately depends on the individual investor’s financial situation and goals. Those who are looking for a safe and reliable way to grow their money may want to consider buying bonds now to lock in the current rate. However, those who are willing to take on more risk may choose to wait until May in the hopes of securing a potentially higher rate.

In conclusion, the decision of when to buy I-Bonds is a personal one that should be based on careful consideration of the current economic climate and each investor’s individual financial goals. By staying informed and consulting with a financial advisor, investors can make the best decision for their unique circumstances.

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