In 2022, many investors turned to U.S. Treasury I-Bonds as a safe and attractive option when inflation rates were soaring. At that time, these bonds were offering an interest rate of around 9%, making them a popular choice for individuals looking to protect their savings from rising prices. I-Bonds, which adjust their rates based on inflation, provided a rare opportunity for strong returns in a low-risk government-backed investment.

However, with inflation cooling in recent months, the situation has changed. As of November 1, 2024, the interest rate on I-Bonds has dropped below 3%. This decrease reflects the broader trend of slowing inflation, which directly impacts the returns these bonds can offer. Given these lower rates, it may be worth considering whether other savings or investment options are now more advantageous.

For those who invested in I-Bonds when rates were high, it might be a good time to review your portfolio. Current money-market accounts and high-yield savings accounts are offering more competitive returns, often outpacing the latest I-Bond rates. As always, consider your financial goals and consult with your advisor to determine the best strategy for your investments moving forward.

Souces:  https://treasurydirect.gov/savings-bonds/i-bonds/

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