Treasury Department announces new Series I bond rate of 6.89% for the next six months

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Jetcityimage | Istock | Getty ImagesThe U.S. Department of the Treasury on Tuesday announced Series I bonds will pay 6.89% annual interest through April 2023, down from the 9.62% yearly rate offered since May.It’s the third-highest rate since I bonds were introduced in 1998, and investors may lock in this rate for six months by purchasing anytime before the end of April.”The rate of 6.89% is another very competitive rate for the I bond compared to other conservative alternatives,” said Ken Tumin, founder and editor of DepositAccounts.com, which tracks I bonds, among other assets.Backed by the U.S. government, I bonds don’t lose value and earn monthly interest with two parts: a fixed rate, which stays the same after purchase, and a variable rate, which changes every six months based on inflation.While early estimates for the I bond rate were 6.48%, the new rate includes a 0.4% increase for the fixed portion of the rate, based on higher Treasury inflation-protected securities yields, Tumin said.More from Personal Finance:Here’s what the inverted yield curve means for your portfolioDemand for Series …

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