What's Likely to Happen to Inflation Bond Rates

I-bonds are likely to become a good — not great — savings option as inflation bond rates are expected to lower.

A cartoon of a piggy bank being inflated.
(Image credit: Getty Images)

Savers have been struggling to keep up with high inflation for more than a year now. Even as interest rates on savings accounts and other options rise, it has been nearly impossible to stay even with inflation on risk-free savings products, with one exception: inflation bonds from the Treasury Department. 

The U.S. Treasury’s I-bond, a savings bond that has its yield adjusted every six months to reflect current inflation, is due to be updated on May 1. Currently, purchasers of I-bonds get a 6.89% annual rate for the next six months, which surpasses just about every other rate on no-risk savings options anywhere. 

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David Payne
Staff Economist, The Kiplinger Letter

David is both staff economist and reporter for The Kiplinger Letter, overseeing Kiplinger forecasts for the U.S. and world economies. Previously, he was senior principal economist in the Center for Forecasting and Modeling at IHS/GlobalInsight, and an economist in the Chief Economist's Office of the U.S. Department of Commerce. David has co-written weekly reports on economic conditions since 1992, and has forecasted GDP and its components since 1995, beating the Blue Chip Indicators forecasts two-thirds of the time. David is a Certified Business Economist as recognized by the National Association for Business Economics. He has two master's degrees and is ABD in economics from the University of North Carolina at Chapel Hill.