There’s been quite a buzz lately in investing blogs and forums about I Bonds. The reason? The annualized interest rate for I Bonds purchased from May through October 2011 is 4.6% for the first six months. I’ll explain the details below, but this means that you will get a minimum return of about 2.5% if you buy an I Bond in late May of 2011 and sell it on May 1, 2012. This is a guaranteed, risk-free return that is much higher than any short-term, safe investment or savings vehicle, except perhaps for a reward checking account, and the interest is free of state taxes. The return could be even higher, depending on inflation during the second six months.