NEWS
BYTES
June 2006
I Bonds
To Earn 2.41% When Bought From May Through October 2006
May 1, 2006
I BOND EARNINGS RATE 2.41%
The earnings rate for Series I Savings Bonds is a combination
of a fixed rate, which will apply for the life of the bond,
and the inflation rate. The 2.41 percent earnings rate for I
bonds bought from May through October 2006 will apply for the
first six months after their issue. The earnings rate combines
the 1.40 percent fixed rate of return with the 1.00 percent
annualized rate of inflation as measured by the Consumer Price
Index for all Urban Consumers (CPI-U). The CPI-U increased from
198.8 to 199.8 from September 2005 to March 2006, a six-month
increase of 0.50 percent.
Treasury’s
inflation-indexed I bonds are designed to offer all Americans
a way to save that protects the purchasing power of their investment
by assuring them a real rate of return above inflation. I bonds
have features that make them attractive to many investors. They
are sold in electronic form in amounts of $25 and above, or
in paper form at face value in denominations of $50, $75, $100,
$200, $500, $1,000, $5,000, and $10,000, and earn interest for
as long as 30 years. I bond earnings are added every month and
interest is compounded semiannually. They are state and local
income tax exempt, and Federal income tax on I bond earnings
can be deferred until the bonds are cashed or they stop earning
interest after 30 years. Investors cashing I bonds before five
years are subject to a 3-month earnings penalty.
Savers
and investors can now open an on-line account to purchase I
bonds in electronic form, as well as EE savings bonds and Treasury
marketable securities, through the website www.treasurydirect.gov.
Account holders can purchase, manage, and redeem I bonds over
the Internet 24 hours a day, seven days a week.
I
BOND FIXED RATE 1.40%
Series I, inflation-indexed savings bonds purchased from May
through October 2006, will earn a 1.40 percent fixed rate of
return above inflation. The 1.40 percent fixed rate applies
for the 30-year life of I bonds purchased during this six-month
period.
EARNINGS
RATES FOR ALL I BONDS
View the earnings rates and actual yields for I bonds shown
in the Savings Bonds Earnings Report.
MORE
INFORMATION
Information about savings bonds is available at Public Debt’s
website at www.treasurydirect.gov. An Earnings Report, which
contains rate and yield information for bonds is available by
mail. Send a postcard asking for “Earnings Report”
to Bureau of the Public Debt, 200 Third Street, Parkersburg,
WV 26106-5312.
