I Bond Yields Are Set to Drop Next Month

Yields on popular Series I savings bonds — intended to protect consumers against price increases — are likely heading down even as inflation continues to surge.

The new yield for I bonds purchased after the end of October is now estimated to be 6.47%, down from a record 9.62%. The rate is linked to the change in inflation over the six-month period from March to September which, while elevated, slowed from the previous half-year stretch.

Americans have purchased billions of dollars worth of I bonds this year. At a time of extreme market volatility, they’ve outperformed major stock indexes and bond markets and are likely to continue to do so even at the lower rate.

“It doesn’t mean inflation’s going down. It means it’s not, comparatively speaking, rising as quickly as it did six months ago,” said Elliot Pepper, financial planner and director of tax at Northbrook Financial.