We finished this one sooner than expected – the I-Bond 2023 video many of you have been waiting for! What is my May 2023 I-Bond rate prediction & when to buy I-Bonds in 2023 👉 that’s what I’ll be answering today given the latest release of January’s inflation (CPI-U) numbers.
Specifically, here’s what I’ll cover:
1. How things are looking on my I-Bond variable rate tracking sheet & what my current prediction is for May
2. How much you could earn on your I-Bonds depending on what the May 2023 I-Bond rate might be & whether you purchased at the 7.12% I-Bond rate, 9.62% I-Bond rate or 6.89% I-Bond rate
3. Why I’ll make my I-Bond purchasing decision between April 12th & April 23rd
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SOURCES:
⭐ BLS January 2023 Inflation Report:
⭐ Treasury Auction Results:
WATCH NEXT:
⭐ May I-Bond Fixed Rate Expectations:
⭐ I-Bond Interest Formula:
⭐ 5% 11-Month Capital One CD:
⭐ 5% 27-Month Sallie Mae CD:
⭐ TIPS vs I-Bonds 2023:
#jenniferlammer #bonds #fixedincome
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May 2023 I-Bond Rate Prediction: When To Buy I-Bonds In 2023
Investing in I-Bonds can be a smart financial decision, offering a safe and reliable way to grow your money. However, it’s important to keep an eye on the changing interest rates to make the most of your investment. In this article, we will explore the predicted I-Bond rates for May 2023 and provide some guidance on when to buy I-Bonds in 2023.
Before diving into the prediction, let’s first understand what I-Bonds are and how their interest rates are determined. I-Bonds are a type of savings bond issued by the U.S. Department of the Treasury. The interest rates on I-Bonds consist of two components: a fixed rate that remains constant for the life of the bond and a variable rate that adjusts every six months based on inflation.
The variable rate is determined by changes in the Consumer Price Index for All Urban Consumers (CPI-U), which measures inflation in the United States. The fixed rate, on the other hand, is set by the Treasury Department and remains constant throughout the bond’s 30-year life.
Given that the variable rate is based on inflation, it is essential to make an informed prediction for May 2023. As of now, it is challenging to provide an accurate prediction for the exact I-Bond rate in May 2023 since it depends on various economic factors such as inflation rates, the overall state of the economy, and monetary policies. However, it is possible to consider some general trends that might guide your decision-making process.
In recent years, inflation rates have been relatively low, which had a direct impact on I-Bond rates. For instance, in May 2022, the I-Bond composite rate was only 1.38%, consisting of a 0% fixed rate and a 1.32% variable rate. While this variability is subject to change, it is important to anticipate a similar trend in 2023, suggesting that the I-Bond rates might remain relatively low.
However, it’s crucial to note that predicting exact rates is challenging due to the unpredictability of economic conditions. Influential factors such as fiscal policies, international trade, and global events can significantly impact interest rates. Therefore, it’s always advisable to monitor the announcements and updates from the U.S. Department of the Treasury before making any investment decisions.
When considering when to buy I-Bonds in 2023, a prudent approach is to spread out your investments throughout the year. This strategy, known as dollar-cost averaging, helps mitigate the risks associated with volatile interest rates. By investing a fixed amount at regular intervals, you can reduce the impact of short-term market fluctuations and potentially benefit from varying interest rates throughout the year.
Another factor to bear in mind is the minimum holding period for I-Bonds, which is one year. This means that if you need immediate access to your funds, investing in I-Bonds might not be the best option. However, if you are looking for a long-term investment that offers protection against inflation, I-Bonds can be a valuable addition to your portfolio.
In conclusion, while it’s challenging to predict the exact I-Bond rates for May 2023, it’s prudent to anticipate that rates will remain relatively low due to recent trends in low inflation. To make the most of your investment, consider spreading out your purchases throughout the year and keep an eye on official announcements and updates from the U.S. Department of the Treasury. By staying informed and taking a long-term investment approach, you can make educated decisions on when to buy I-Bonds in 2023.
Me and my wife bought our 10k each in November 2021 a 7.14% then again January 2022 a 9.62%. In late 2022 I bought 26 week t bills instead, they were at an around 4.8% -5.1% and are starting to come due. Because of the debt ceiling issue I won’t be reinvesting in treasuries. Ally had a no penalty 12 CD at 4.75% and Marcus has a 10 month CD at 5.05%. That’s where I’m putting my money for now.
is it ok to stack up 26 week T-bills now as they are going close to 5%.. considering recession and debt ceiling and all the issues
I'm guessing the I-bond rate for May 23 will be around 3.5%
Well, after this latest CPI my math makes it 3.6% plus whatever fixed rate is. I DO have an issue with what the CPI is (only 0.1%) because that's not what I saw in March at the grocery store and at the gas pump!
Very very good information I will be looking into it. Thank you.
Hi, you recommend to buy in April 12/23. Do we have have to wait for the rates for May 1st?
Will there be an update as we get close to 4/12 -4/23?
Hi 🙂 writing in April to find out what the new prediction is. If you can guide me to the newest video I'd be very grateful
Is it still worth to opt for an i-bond with tax refund if I'll get my refund after May 2023? Or should I rather invest the refund in a T-bill, CD or HYSA?
Auto purchase of I-bonds for the kids is the game plan. Supplemental/alternative to 529 and/or equity accounts for further down the road. Thanks for doing the math.
When will Treasury DIRECT withdraw money if I place the Ibond order on their website? Since I have Tbill in bank account mature on 04/27, usually the cash is available to transfer on 04/28, do I have enough time?
I think we are in a short interim period where inflation falls. However, given the terrible future possibility that the dollar loses its reserve status, I expect long treasury rates and inflation to rise.
I must be a dumb dumb! If I purchased I bonds on 10/1/22 at 9.62%, how do they now (4/4/23) show a rate of 6.48%? I'm confused by the predicted rate for 5/1/23 of 6.89%. I think I thought I would be at 9.62% for a little more than 6 months until the new rate came out?
You are a gentleman and a scholar
Adding to my first comment, especially if there's a credit crunch, which the Fed says will have the same effect of slowing as would the raising of interest rates. If a credit crunch arises then cash will become king, and prices in the Main St economy will fall. There is too much uncertainty. Maintaining liquidity is key to greater wealth building opportunities, I think.
Global supply chains are still transitioning, and we remain in an economic war with China (by lowering US import spending). Therefore, I believe inflation is a large part of these conditions and will remain so until supply chains are more reasonably centered in the Indo-Pacific but at prices near China's. I don't think the Federal Reserve can control inflation, nor can they avoid recession. For this reason I want liquidity, so I can buy up assets in desperation sales.
The volatility in the banking systems and the markets causes me to maintain liquidity rather than lock my money up in bonds or CDs. Having lived through the savings and loan crisis I'd say the present times look very much like that. Cash was king. People were so desperate for liquidity then.
I have some I bonds I inherited back in the 90’s. When is the best time to cash in?
haven't bought a lot at the current rate of 6.8..Think its worth it to buy a 10k lot now guys? thanks for the reply.. feel like even if the next 6months give 5% feel like its better than buying the 6 month t bill..
Great information. Thanks.
You have a sense of humor that helps lighten up these decisions. Thank you for your hard work to help us all make wise financial decisions. My first t-bill came due and dropped into my checking account today and I had no idea where the money came from and THEN I figured it out. They don't give you a good indication of why the deposit. APA TREAS 310 PAY was what it said. FYI for your viewers.
I purchased 10l of ibounds in OCT of 2022 at 9.62% wondering how long I should leave the money there
Great presentation. Is there a way for me to find when it and any others were recorded, the date?
Jennifer
Waiting for your iBond April interest forecast video. Usually you post within days of CPI data coming out
Dear Jennifer : How do I get my money out back to the outside account I transferred money to TreasuryDirect to buy my IBonds in the first place ?
Have you looked at the ibond interest rate summary on treasury direct? The 9.62 percent has disappeared. I also noticed that I have not gotten paid 9.62 percent adjusted for total months held.
isn't it better to have some form of fixed rate? there was a rush to buy in October but those have 0% fixed. I was fortunate to get in back @ 7.12 but continue to buy each period since.
so if i buy i series is my interest rate locked in until i cash it in over 5 years?
Ally no penalty CD 11Months 4.75% APY right now. — Not bad
not planning on buying i-bond this go around, I just moved my money market savings account to UFB Direct at 5.02%, I'll hold my current i-bond for a while because it won't be a year old until May. I'm 55 years old.