I bond rates dropped Monday, but not as much as expected.

The yield on Series I savings bonds fell to 4.3% in a reset that happens twice a year on the first day of May and November. That’s down from 6.89% in the prior six months and a historic high of 9.62% last year.

Cooling inflation measures are dragging the rates lower, since I bonds are designed to protect Americans’ savings from rising prices. Their return is now approaching that of some high-yield savings accounts, which have upped their yields as the Federal Reserve raises benchmark interest rates.

Still, Monday’s new rate is better than the predicted level of 3.8%. It’s comprised of two measures: a variable rate that rises and falls with the consumer price index and a somewhat enigmatic fixed rate that’s set by the Treasury Department and doesn’t change over the life of the bond. That fixed rate rose to 0.9% Monday from 0.4% in the prior period.

The exact reason for the increase is somewhat of a mystery — the Treasury Department provides a formula for how it calculates the variable rate but gives no insight into the fixed rate, which has fluctuated from zero to as high as 3.6% over the past 25 years.

Some financial experts say that those who previously plowed money into I bonds — sales have topped $40 billion since November 2021 — might be better served putting their cash elsewhere. Goldman Sachs Group’s Marcus currently offers 3.9% for a high-yield savings account, while Barclays and Ally Bank offer similar products with rates of 4% and 3.75%, respectively. With those, you can take your money out at any time with no penalty, while I bonds prohibit withdrawals in the first year.

However, there’s no reason for those currently holding I bonds to run for the exits immediately. If you bought I bonds in April, you still have the 6.89% rate until six months after your purchase. And since taking your money out of I bonds before five years is up means forgoing the last three months in interest, waiting an additional three months from that date ensures you’re giving up three months of 4.3% in interest, instead of that higher 6.89% rate. 

This article was provided by Bloomberg News.