Maybe it’s just me?
By David Enna, Tipswatch.com
TreasuryDirect has posted an updated notice about the upcoming change in rates for U.S. Series I Bonds, and this time it almost nailed it.
At times in the distant past, TreasuryDirect would have posted nothing at all about the I Bond rate change. But after the I Bond mania of 2022 it began trying to give investors a heads up about the upcoming changes and when they would actually take effect.
Sometimes the warning was a little too “nuanced” to make effective sense. This is what it posted last year at this exact time:
The logical question was: “What does complete your purchase mean?”
But then, a few days later, it updated that message to say:
Investors can easily get confused when TreasuryDirect says they must “complete” the purchase before midnight Oct. 31. The problem is the meaning of the word “complete.” When you place an order for an I Bond — let’s say on Oct. 30 — it is actually completed on the next business day, Oct. 31.
I liked the wording last year saying you must “request your purchase by 11:59 p.m. Eastern Time on Wednesday, October 30.” That was a clear statement, which corrected the earlier misleading (but technically accurate) alert which said “complete your purchase” by Oct. 31.
So now what?
Clearly the new I Bond rates to be in effect for purchases from November 2025 through April 2026 will be announced on the morning of Oct. 31. (This has been the practice in recent years.) At that point, all purchase requests will be filled as November 2025 issues with the new rates.
This October 2025 alert seems to move up the date of the I Bond purchase by one day, stating you must “complete your purchase” by 11:59 p.m. on October 30. Technically, that means you must “request your purchase” by 11:59 p.m. on October 29.
TreasuryDirect provides a link to questions and answers, which sort of helps:
When will the overall (or, composite) interest rate for I bonds on sale in TreasuryDirect change?
The current rate of 3.98 percent remains until 11:59 p.m. Eastern Time on Thursday, October 30. Then the next rate becomes available at midnight. Savings bond purchases in TreasuryDirect are processed on the next business day, so a bond purchased on October 31 will receive the newest interest rate.
This again raises confusion. If an investor places an order on Oct. 30, does that mean the bond was “purchased” on Oct. 30, even though the sale would not be finalized until Oct. 31? In the past, that has how it has worked. But right now I am not so sure.
To be more accurate, if this is indeed accurate, I think the TreasuryDirect notice should have said:
To receive the current 3.98% rate for I Bonds in TreasuryDirect, you much request your purchase by 11:59 p.m. Eastern Time on Thursday, October 30. The bond would have an issue date of October 2025 and secure the current interest rate.
However, TreasuryDirect’s advice to place orders a day or two early is excellent, no matter how you read it.
The solution: Do not delay!
Many I Bond investors are eager to buy in October to lock in the permanent fixed rate of 1.10% for the life of the savings bond. That rate seems likely to fall to 0.9% at the November 1 reset, even though the composite rate is likely to rise slightly.
See this: September inflation report sets I Bond variable rate at 3.12%
I have been advising I Bond investors to lock in purchases on Tuesday, Oct. 28, to make sure you absolutely, positively will get the October 2025 issue with the 1.10% fixed rate. And yes, it is also likely that Oct. 29 will be fine for you risk takers.
Placing the order on October 30 always seemed risky, and given this new wording from TreasuryDirect, I’d definitely advise against it.
In summary. Regular readers will know I am projecting the November rate reset will drop the fixed rate to 0.90% (pretty certain) from 1.10% and the variable rate will rise from 2.98% to 3.12% (very certain), resulting in a new composite rate of 4.03%, up from the current 3.98%.
However, I believe it is a better move to make the investments in October (no later than Oct. 28) to lock in the fixed rate of 1.10%. You’d get 3.98% for six months and then 4.23% for the next six months.
• Confused by I Bonds? Read my Q&A on I Bonds
• Let’s ‘try’ to clarify how an I Bond’s interest is calculated
• Inflation and I Bonds: Track the variable rate changes
• I Bonds: Here’s a simple way to track current value
• I Bond Manifesto: How this investment can work as an emergency fund
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David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. I Bonds and TIPS are not “get rich” investments; they are best used for capital preservation and inflation protection. They can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.
