THE LOWDOWN ON I BONDS

Inflation has made Series I savings bonds enormously popular with risk-averse investors. Here are some answers to your questions.

- LISA GERSTNER

SERIES I SAVINGS BONDS are drawing a lot of attention. Thanks to high inflation, those issued from May through October 2022 offer a sky-high composite rate of 9.62%. We've compiled answers to frequently asked questions about the bonds.

How is the interest rate determined? The composite rate has two parts: a fixed rate, which remains the same for the life of the bond, and an inflation rate, which is based on the consumer price index. Each May and November, the U.S. Treasury Department announces a new fixed rate and inflation rate that apply to bonds issued during the following six months. The inflation rate changes every six months from the bond's issue date. If your bond is issued in October 2022, for example, the current inflation rate will apply through March 2023. (Note that I bonds are issued the next business day after you purchase them-so if you wait until the last day of October to buy a bond, for example, it will have a November issue date.) The fixed rate for I bonds issued from May through October 2022 is 0%.

How does interest accrue?