A Series I savings bond is a U.S. Treasury bond that earns a combined rate made of two parts: a fixed rate set when you buy it and kept for 30 years, plus an inflation rate reset every six months. I bonds issued from November 1, 2026 to April 30, 2027 earn 5.51%, including a 1.40% fixed rate.
Interest accrues monthly and is added to the bond twice a year, the bond can be cashed after 12 months, and cashing before 5 years costs the last 3 months of interest. The sections below show how the rate is calculated, how the last three years of rates compare, what $10,000 grows to, and the rules on buying, cashing and tax.
How is the I bond rate calculated?
Treasury sets two numbers every May 1 and November 1:
- Fixed rate: an annual rate that applies for the life of every I bond issued in the next six months. It never changes for that bond.
- Semiannual inflation rate: based on the change in the non-seasonally adjusted Consumer Price Index for all Urban Consumers (CPI-U), all items including food and energy. It applies to every I bond ever issued, for six months at a time.
They are combined with this formula:
combined rate = fixed rate + (2 × semiannual inflation rate) + (fixed rate × semiannual inflation rate)
For bonds issued November 2026 to April 2027:
- 0.0140 + (2 × 0.0204) + (0.0140 × 0.0204)
- = 0.0140 + 0.0408 + 0.0002856
- = 0.0550856, rounded to 0.0551 = 5.51%
The inflation rate is doubled because it is a six-month figure and the combined rate is annual. The small third term reflects the fixed rate applying to a value that inflation has already increased.
What happens when there is deflation?
If CPI-U falls, the semiannual inflation rate is negative and pulls the combined rate below the fixed rate. Treasury does not let the combined rate go below zero. In May 2015 the semiannual inflation rate was −0.80%; for a bond with a 0.00% fixed rate the formula gives 2 × −0.80% = −1.60%, so that bond earned 0.00% for those six months instead. The bond's value stayed the same; it did not shrink.
What have I bond rates been recently?
The combined rates below are calculated with the formula above from the fixed and inflation rates TreasuryDirect publishes. They apply to new bonds bought in the six months starting on each date.
| Rates set on | Fixed rate | Semiannual inflation rate | Combined rate for new bonds |
|---|---|---|---|
| Nov 1, 2026 | 1.40% | 2.04% | 5.51% |
| May 1, 2026 | 0.90% | 1.67% | 4.26% |
| Nov 1, 2025 | 0.90% | 1.56% | 4.03% |
| May 1, 2025 | 1.10% | 1.43% | 3.98% |
| Nov 1, 2024 | 1.20% | 0.95% | 3.11% |
| May 1, 2024 | 1.30% | 1.48% | 4.28% |
| Nov 1, 2023 | 1.30% | 1.97% | 5.27% |
The 1.40% fixed rate for November 2026 is the highest in this period, and it is the part that stays with the bond. Fixed rates from May 2020 to May 2022 were 0.00%, so bonds bought then earn only the inflation part for their whole life.
When does an I bond's rate change?
Although new rates are announced in May and November, each bond's rate changes every six months from its own issue month. A bond issued in January changes rate on July 1 and January 1; one issued in March changes on September 1 and March 1; one issued in November changes on May 1 and November 1.
Because the fixed rate is locked, two bonds can earn different rates in the same month. From November 2026, a bond bought in November 2023 (1.30% fixed) earns:
- 0.0130 + 0.0408 + (0.0130 × 0.0204) = 0.0540652, which rounds to 5.41%
A bond bought in May 2026 (0.90% fixed) earns 0.0090 + 0.0408 + 0.0001836 = 5.00% from its November 1 reset. New bonds earn 5.51% because of the higher fixed rate.
How does the interest grow?
I bonds earn interest from the first day of the month they are bought. Interest accrues monthly, and every six months Treasury adds the interest earned to the principal, so the next six months' rate applies to a larger value. This is semiannual compound interest: each six-month period grows the bond by the combined rate ÷ 2.
What is a $10,000 I bond worth after 1, 5 or 30 years?
The table assumes the 5.51% rate stayed the same for the whole period, which it will not, so it shows the mechanics rather than a forecast. Values under 5 years have the 3-month interest penalty taken off. Calculated with the same method as the savings bond calculator: 2.755% per six-month period, with partial periods accrued monthly.
| Held for | Value if cashed | Interest earned |
|---|---|---|
| 1 year | $10,417.05 | $417.05 |
| 18 months | $10,704.03 | $704.03 |
| 2 years | $10,998.93 | $998.93 |
| 3 years | $11,613.32 | $1,613.32 |
| 5 years | $13,122.89 | $3,122.89 |
| 10 years | $17,221.04 | $7,221.04 |
| 20 years | $29,656.41 | $19,656.41 |
| 30 years | $51,071.41 | $41,071.41 |
The 18-month row follows TreasuryDirect's own example: a bond cashed after 18 months is paid the first 15 months of interest. Without the penalty, one year at 5.51% would be worth $10,558.59, so the penalty costs about $141 at the 12-month mark. From year 5 on, there is no penalty.
TreasuryDirect values electronic bonds in the account itself and computes them per $25 unit with rounding, so its figures can differ from these by a few cents.
What are the rules for buying and cashing I bonds?
| Rule | Detail |
|---|---|
| How to buy | Electronically in a TreasuryDirect account; paper I bonds ended January 1, 2025 |
| Minimum | $25, or any amount above that to the penny |
| Annual limit | $10,000 in electronic I bonds per Social Security Number or EIN per calendar year |
| Gifts | Count toward the recipient's limit, not the giver's |
| Earliest cash-in | After 12 months |
| Early penalty | Before 5 years, the last 3 months of interest are lost |
| Maturity | Earns interest for 30 years, then is paid out automatically (electronic) |
There is no limit on the total amount of savings bonds one person can own, only on how much can be bought each year. The yearly limits are counted by the Social Security Number of the first person named on the bond.
How are I bonds taxed?
- Federal income tax: yes, on the interest.
- State and local income tax: no.
- Federal estate and gift taxes, state estate or inheritance taxes: yes.
The owner chooses whether to report the interest every year or all at once when the bond is cashed or matures. Interest used for qualified higher education expenses may be excluded from income; TreasuryDirect notes that the owner must have been at least 24 years old when the bond was issued, so a bond registered in a child's name does not qualify. Income limits and other conditions apply, through IRS Form 8815.
I bonds vs EE bonds, savings and CDs
| Option | Rate (Nov 2026) | Rate type | Access |
|---|---|---|---|
| I bond | 5.51% | Fixed + inflation, resets every 6 months | Locked 12 months; penalty before 5 years |
| EE bond | 2.90% | Fixed for at least 20 years; doubles at 20 years | Locked 12 months; penalty before 5 years |
| Savings account (FDIC average, Oct 2026) | 0.38% | Variable | Any time |
| 12-month CD (FDIC average, Oct 2026) | 1.76% | Fixed for the term | Penalty before maturity |
An EE bond is guaranteed to double in value at 20 years, which works out to about 3.5% a year if held exactly that long (2^(1/20) − 1 = 3.53% with annual compounding). The I bond is the better fit when protection against higher inflation matters; the EE bond only makes sense when the money will stay put for 20 years.
Bank deposits stay accessible and are covered by deposit insurance, while I bonds are backed by the U.S. Treasury. For cash that may be needed within a year, compare a money market account vs a savings account or a CD vs high-yield savings instead.
What are the downsides of I bonds?
- 12-month lock-up: the money cannot be reached at all for the first year.
- Early penalty: three months of interest before year 5.
- Annual cap: $10,000 per person per year in electronic I bonds.
- Falling rates: when inflation cools, the combined rate falls with it; only the fixed part is guaranteed.
- TreasuryDirect only: bonds cannot be bought or held at a regular bank or brokerage.
This guide is for education only and is not financial advice.