September 2015 CPI-U numbers released: Wait for November 2015 I Bonds
As always, now is one of the best times to consider purchasing I Bonds. The reason for this is that we now know what the rate of return for October 2015 I Bonds will be for both the first and second six month periods, which is important since I Bonds must be held for 12 months before they can be redeemed.
Using the CPI-U data from March 2015 (236.119) and September 2015 (237.945) (courtesy of inflationdata.com), we can calculate the variable rate for the second 6 month period for October 2015 issue I Bonds:
That would mean these bonds would earn a rate of 0% (using 0% fixed & 0% variable) for the first 6 months and 1.54% (combined 0% fixed & 1.54% variable) for the second 6 months. Obviously, it makes sense to wait until November to make the purchase to avoid six months of 0% interest. Even though we only know the interest rate for the first six months of November 2015 Series I savings bonds, that 1.54% rate is competitive when compared to short term investments like the 1 year CD @ 1.30% APY currently being offered at CIT Bank.
The dip in oil prices over the past year or so telegraphed the current 0% composite rate, so I will probably buy the maximum amount from treasurydirect.gov in November since I have held off on buying so far in 2015. I'll continue to keep an eye on the CPI-U in the meantime and will evaluate my next potential purchase in April 2016.