The U.S. Treasury’s newest savings bonds, which will pay a return based on the consumer price index, will go on sale in September, the government announced Wednesday.
The new bonds, called Series I, are an extension of the Treasury’s inflation-indexed securities and are intended to encourage Americans to save more by offering protection for interest income against future rises in the cost of living.
The bonds, backed by the full faith and credit of the U.S. government, will offer an interest rate lower than the rate on standard savings bonds and feature an additional principal payment based on changes in the government’s consumer price index over the period the bond is held, the Treasury said.
Over the last year, the CPI rose by 1.7 percent. If the inflation rate falls, an I-bond’s value will remain the same, the Treasury said.
The new bonds will sell at face value in denominations from $50 to $10,000. Interest income will be added to the principal amount at redemption. Interest is exempt from state and local taxes, and federal tax is deferred until redemption.
In the standard Series EE savings bond program, denominations also range from $50 to $10,000, but those bonds are sold at half their face value.
