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How the I Bond Earnings Rate is Set</h2></center>
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<font color="#FF0000"><b>Note:</b> I Bonds will be available September 1, 1998.</font><p>
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The I Bond earnings rate is a combination of two separate rates: a fixed
rate of return and a semiannual inflation rate. Each May and November,
the Treasury announces a fixed rate of return that applies to all I Bonds
issued during the six-month period beginning with the effective date of the
announcement, May 1 or November 1. The fixed rate for any given
I Bond will never change.
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Also, every May and November, the Treasury determines a semiannual
inflation rate based on changes in the Consumer Price Index for all
Urban consumers (CPI-U). The semiannual inflation rate announced in May is
a measure of inflation from the previous October through March; the rate
announced in November is a measure of inflation from the previous April through
September. The CPI-U is published monthly by the Department of Labor’s Bureau of
Labor Statistics. The semiannual inflation rate is then combined with the fixed
rate of an I Bond to determine the bond’s earnings rate for the next six
months.
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<font size=-3><i>Updated July 8, 1998</i></font>
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