I bonds now pay 5.51% — but there are trade-offs. What to know before buying
CNBC · Kate Dore, CFP®, EA ·
I bonds are now paying 5.51%. Here are some key things to know before investing, according to financial experts.
Now that Series I bonds pay higher interest, the government-backed, nearly risk-free asset could be more attractive for certain investors. But I bonds have downsides, and there are alternatives to consider.
Newly purchased I bonds currently pay 5.51% annual interest through April 30, up from the 4.26% yield offered on purchases made through October.
Amid rising inflation, the variable part of I bond interest rose to 4.08%, while the fixed part increased to 1.40%, the highest since 2006. Combined, the 5.51% composite rate is the biggest yield since November 2022.