I am planning to purchase I-bonds from the U.S. Treasury within the next few months. I could buy them now or in November. When would be a better time? The fixed-rate component of the bonds will change on November 1. Should I wait?

Yes. Even though the overall rate for I-bonds will likely fall when the new rates are set in November, the 30-year fixed component of the I-bond's yield will likely edge higher, providing a better long-term return.

I-bond rates are made up of two parts: a fixed component (currently 1.1%), which applies for the 30-year life of the bond; and a variable component, currently 3.5%, based on the inflation rate over the previous six months (as measured by the change in the consumer price index). The variable component adjusts every six months and is unusually high right now because of a spike in energy prices just before the U.S. invaded Iraq.

Now that inflation is back down around 2%, the variable component will likely fall when the rates are re-set in November. Remember, the variable rate will change for every I-bond holder, no matter when the bond was purchased.

The good news is that the fixed component will likely rise after November 1, probably to around 1.5%. If that happens, people who buy the bonds after November 1 may end up with a 3.5% rate (2% plus 1.5%). People who buy the bonds before then will end up with the same inflation component as the new bond buyers after the first six months, but will be stuck with the 1.1% fixed component for all 30 years.

For more information about I-bonds, see the The I's Have It.

MORE: Kiplinger.com | Investing | Column

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