the us treasury announced on tuesday that i bonds bought starting on november 1 until the end of april next year would have an annualized interest rate of 689 this was greater than the anticipated 648 as the treasury added a 040 kicker or fixed rate to them with a small benefit from compounding the rate for the next six months will be 689 which is the third highest starting interest rate for i bonds since they were first offered in 1998 the benefit of having a fixed rate added to the inflation calculation for i bonds 04 in this instance is that the fixed rate is added to these bonds when the interest rate is reset every six months no matter the inflation rate portion this is this the first time that a fixed rate has been added to new i bonds since 02 was tacked on for ones bought from november 2019 to april 2020 the fixed rate has ranged from 00 to 07 since the may to october 2008 bonds when i bonds were introduced in 1998 the fixed rate was 34 and the total interest rate was 466 689 is still a very good rate while the i bonds interest rate has fallen and will continue to decrease as inflation drops they are still worthwhile investments to consider even with their limitations its rate compares to however if the inflation rate falls a large amount over the next six months the inflation portion of i bonds will decrease this means the interest rate for the first full year could be substantially below the current 689 if this occurs and inflation continues to be low the i bonds interest rate may not be competitive one could then sell the i bonds after one year has elapsed since buying them one of the downsides of i bonds besides only being able to invest 10000 per calendar year and having no ability to redeem in the first year is if the bonds are redeemed in the first 5 years there is a threemonth interest penalty however this applies to the last three months of interest so in the scenario that inflation declines substantially the lost interest income should be minimal if you have up to 10000 or 20000 for a couple each with their own 10000 investment that you don’t need for one year it is worth your time to research these since they are a good hedge if inflation remains high to understand the pros and cons of series i bonds read this article before you decide to buy them check out treasurydirectgov for more info below are three us treasury sites to provide more information and how to create an account this site provides a good overview of series i savings bonds explanation of how the interest rate is determined along with historical rates this site is where one can open an account