Since the yield on Series I savings bonds dropped in May, investors have redeemed about $800 million worth of the securities, more than in all of 2021. That’s a big change from last year, when Americans piled into I bonds to shield their savings from inflation.
I bonds were designed to help Americans do just that. The yield is set twice a year on the first day of May and November. It’s composed of a variable rate based on the consumer price index and a fixed rate set by the Treasury Department.
As rising prices diminished the value of cash last year, I bonds — which yielded a record high interest rate of 9.62% between May and November 2022 — became all the rage. And even when the yield dropped to 6.89% in November, investors were still pouring in billions.
Read the full story on Bloomberg here.