The initial six-month rate for Series I Savings Bonds could exceed 7% after November 1. The inflation component of the I bond rate will be 5.69% for rate periods beginning from November to April. This represents the annualized change in the Consumer Price Index between March and September, which was announced this morning. Using the current I bond fixed base rate of 1.2% creates a composite I bond rate of 6.92%. If theTreasury increases the base rate for new I bonds to 1.3% or more, the rate on new I bonds will exceed 7%. Older I bonds will pay from 6.72% to 9.39% during their next six-month rate period. I bonds issued from May 2004 through April 2005 have the lowest base rate - 1.0% - and will earn the 6.72% rate. I bonds issued from May through October 2000 have the highest base rate - 3.6% - and will earn the 9.39% rate. Even after the early withdrawal penalty, I bonds purchased before the end of this month will earn a guaranteed one-year APY (yield after compounding) of 4.13%. This is a combination of six months at the current composite rate of 4.80% plus three months at 6.92% (the other three months of interest are lost to the penalty). This is well above the best current 1-year CD rates.