Treasury's I Bonds Now Yield 6.89%, Down From 9.62%

The U.S. Treasury’s popular Series I savings bonds will now yield 6.89% over the next six months, down from 9.62%.

I bond rates reset at the beginning of May and November, with the rate pegged to a fixed rate and to the Consumer Price Index (CPI), which is the largest component of the rate.

Investors had flooded into I bonds to take advantage of the 9.62% rate before it expired on Friday, buying about a billion dollars worth of the bonds on Friday alone and crashing the Treasury Direct website, which is the only place to buy the bonds.

The new 6.89% rate is still the third-highest rate since I bonds debuted in 1998. There are some restrictions on the bonds. Investors can’t redeem these bonds for a year after they are purchased and investors will owe a penalty equal to three months’ interest if they are cashed out at any time during the first five years of owning the bond.

Also, investors can only buy up to $10,000 worth of I bonds per person per calendar year, although you can buy an additional $5,000 worth of I bonds using money from your tax refund.