Eagle-eyed readers of the Inquirer's MarketWatch investment page have already noticed the rise in the rate for U.S. Savings Bonds.
But the reason why will likely be small comfort for small investors.
The federal Bureau of the Public Debt on Monday the rate for Series I Savings Bonds issued from May through October will be 4.6 percent, up from 0.74 percent for the last six months. Here's a link to the announcement.
Why the jump? Blame it on inflation. The bond rate is set based on the annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers.
Between September and March, that index recorded a 2.3 percent increase. Multiply that by two and you get the 4.6 percent rate that the Series I bond will pay for the next six months. Then it will change again.
And yes, the I bonds do incorporate a fixed rate of interest too. But once again, it's zero. So for the life of any Series I bond an investor would buy during the next six months, the fixed rate will always be zero.
To check previous fixed and inflation rates, check out this link on the TreasuryDirect website.
The interest rate for Series EE bonds was increased to 1.1 percent from 0.6 percent six months ago.