All about Savings Bond rate periods

There are lots of confusing things about Savings Bonds interest rates, but King of the Misunderstood Hill is confusion about rate periods.

Every Savings Bond has a series of six-month rate periods that begin with the month in which the bond is issued. Today's Savings Bonds pay interest for 30 years, so they have 60 rate periods.

What's confusing is that the Treasury announces new interest rates for Savings Bonds in May and November, but the announced rates don't apply to a specific Saving Bond until its next rate period begins, which is zero (for bonds purchased in May or November) to five (for bonds purchased in April or October) months later.

If you have a copy of my book, Savings Bond Advisor, look up rate periods in the index. In addition to a bit longer explanation, there's a full-page diagram that will help you understand these relationships.