I-Bonds, buy now or wait till November?

[VasyaPupkin]

Seeing how the current fixed rate is 0%, what do the esteemed Mustachians think are the chances of it going above 0% next time the rates are announced? I am moving some funds from a 0.1% CD (yes, really...) to either Ibonds or just an online 0.8% account for a bit, so I could wait and see what the new Ibond rates will look like.

[fiveoclockshadow]

It is administratively set so not very predictable. As far as history goes the highest 10 yr TIPS real yield when a 0% I bond was issued was 1.5%. And the lowest when non-zero issued was 1.3%.  So there is uncertainty and they may consider the whole yield curve - 10 year is just and easy ready reference. Current yield is 0.8%. So it would seem we are almost 0.5% away from the rate bumping by 10 or 20 bp. 

So possible but not likely? 

The opportunity cost of waiting is is three months interest differential between your savings and I bond rates. That's around 0.1%. If the I bond does go to 0.1 you will break even in a year.  So I guess no reason not to wait if you plan to hold the bonds a long time.

[VasyaPupkin]

Makes sense, thanks!