Farewell to the I bond frenzy.

Since the yield on Series I savings bonds dropped in May, investors have redeemed about $800 million worth of the securities, more than in all of 2021. That’s a big change from last year, when Americans piled into I bonds to shield their savings from inflation.

I bonds were designed to help Americans do just that. The yield is set twice a year on the first day of May and November. It’s composed of a variable rate based on the consumer price index and a fixed rate set by the Treasury Department.

As rising prices diminished the value of cash last year, I bonds — which yielded a record high interest rate of 9.62% between May and November 2022 — became all the rage. And even when the yield dropped to 6.89% in November, investors were still pouring in billions.

Now, inflation is finally slowing down, and the I bond yield fell to just 4.3% in May. That caused net sales to plunge to just $40 million so far in July, a 99% decline when compared with the $4 billion purchased in January.

If inflation continues to cool as the Federal Reserve hikes rates, the next I bond yield — which will be set on Nov. 1 — will be likely be even lower than 4.3%.

For investors looking to pull their cash out, the timing can make a big difference. I bonds will have the rate at the time of purchase locked in for six months, then will change to the latest rate. That means those who bought I bonds in April — with the 6.89% rate — won’t face the 4.3% rate until October.

The lower I bond yield is leading some to look toward more flexible options for cash, like high-yield savings accounts. Goldman Sachs Group’s Marcus currently offers 4.15%, while Barclays has a similar product with a rate of 4.35%. Those products allow withdrawals anytime with no penalty, while I bonds prohibit withdrawals in the first year, and cashing out before five years are up means forfeiting the last three months of interest.

The government has been selling the securities since 1998, up to a maximum limit of $10,000 per person each calendar year.

This article was provided by Bloomberg News.