All of you patient “chicken money” holders have something to cheer about — if you understand the rules and restrictions. The headline is that for the next six months, Series I savings bonds will carry an interest rate of 7.12%. Now, before you jump into this deal, please read the details below!

Series I U.S. Savings bonds have been a “bad deal” for the past few years. As a reminder, they carry a fixed base rate and have an inflation “adjustment” every 6 months — on November 1st and May 1st.

]In recent years — and still today — the base rate on these I bonds is ZERO — That’s right — nothing! And the “inflation adjustment” has been minimal in recent years.

But the new adjustable rate for the coming 6 months is that 7.2%. Then, in May, they will announce another 6-month rate for the coming 6 month period. That rate adjustment is based on inflation, which at this moment shows no signs of abating. But you never know!

And, don’t think that you’ll just buy some I-bonds and then sell them in 6 months. You can’t sell them before one year. AND, if you sell before holding for 5 years, there is a PENALTY — of the loss of 3 months’ interest! So these Series I bonds are meant to be a buy-and-hold investment.

You can buy Series I Savings Bonds directly from the U.S. government at www.TreasuryDirect.gov.
Minimum purchase is $50, maximum for these electronic purchases is $10,000.
Money is taken directly from the bank account you specify, and the bonds are held electronically — not sent to you in paper form.

Read all details at the TreasuryDirect website linked above.