Series I Bond Variable Component to Reset on November 1 at 3.07%

As this section on BestCashCow.com explains, Series I bonds are an investment vehicle offered by the Treasury to enable savers to put away small amounts of money each year in a product that protects from inflation. Interest of Series I bonds is composed of a fixed component based on the date of purchase and a variable component based which resets each six months. The fixed component on Series I bonds purchased until October 31, 2009 is 0.10%; bonds purchased from November 1, 2009 onwards will have a fixed component to be announced by the Treasury on that date.

Whereas Seres I bonds have not yielded any interest since May 1, due to a negative CPI-U measurement (a deflationary measurement) from September 2008 to March 2009, the current measuring period indicates a semi-annual inflation movement of 1.53% (March 2009 CPI-U was 212.709; September 2009 CPI-U was 215.969 - equalling a semi-annual increase of 1.53%). As a result, using the Treasury's formula, Series I bonds will have a variable rate of 2 x 1.53% or 3.07%.