Series I Savings Bonds: Rates & How to Buy (2026)

What I bonds pay right now

Series I savings bonds are U.S. Treasury securities designed to keep pace with inflation. Their return is split into two parts: a fixed rate that stays the same for the 30-year life of the bond, and an inflation rate that resets every six months based on the Consumer Price Index (CPI-U). Together they produce the composite rate you actually earn.

For bonds issued from May through October 2026, the composite rate is 4.26%. That's made up of a 0.90% fixed rate and a 3.34% annualized inflation rate (1.67% over the six-month measuring period)^[1]. The Treasury announced the rate on May 1, 2026, and it applies only to bonds purchased during that six-month window — and only for the first six months after the bond is issued^[1].

The rate that came before it, for bonds issued from November 2025 through April 2026, was 4.03% — the same 0.90% fixed rate plus a slightly lower 1.56% six-month inflation component^[2]. The fixed rate has held at 0.90% for two consecutive windows, after sitting at 1.10% in May 2025 and 1.20% in November 2024^[2].

How the composite rate is calculated

The Treasury uses a fixed formula to combine the two pieces, and it's simpler than it looks:

Composite rate = fixed rate + (2 × semiannual inflation rate) + (fixed rate × semiannual inflation rate)

For the current period that works out to 0.0090 + (2 × 0.0167) + (0.0090 × 0.0167), which rounds to about 4.26%^[2]. The "2 ×" turns the six-month inflation figure into an annualized number, and the small third term accounts for the fact that the fixed return itself also compounds.

The fixed rate is set by the Treasury and never changes for the life of your bond — if you buy today, you keep 0.90% for 30 years no matter what happens to rates later. The inflation rate is the part that moves: it's recalculated every May 1 and November 1 from the change in CPI-U, so your composite rate adjusts every six months from your purchase anniversary^[2].

That reset mechanism is the key difference from a CD or savings account. A fixed APY can be cut at any time by your bank; an I bond's rate is guaranteed by formula for six-month stretches, and the fixed component is locked forever. The next rate announcement is expected on November 1, 2026, and will apply to bonds bought from November 2026 through April 2027^[1].

Purchase limits and holding rules

I bonds come with strict purchase and holding rules that make them a slow-moving, long-term savings tool rather than a place for money you might need soon. The most important one to know up front: you cannot redeem an I bond at all during the first 12 months after it's issued^[5].

The annual purchase limit is $10,000 per Social Security Number for electronic I bonds through TreasuryDirect, and you can buy as little as $25 at a time^[3]. You can also buy additional bonds as gifts for children or others. One recent change to note: as of January 1, 2025, you can no longer buy paper I bonds with your federal tax refund, so electronic purchase is now the only route^[1].

If you redeem a bond between years one and five, you lose the most recent three months of interest as a penalty^[1]. That penalty disappears after five years. The bond itself stops earning interest after 30 years, at which point it's time to redeem^[1]. Taken together, the practical profile is: money you're confident you won't touch for at least a year — and ideally five years — is the best fit.

How I bond interest is taxed

I bond interest is subject to federal income tax but is exempt from state and local income taxes^[4]. Most people choose to defer the tax until they redeem the bond or it matures, at which point the interest is reported on a 1099-INT. You can instead elect to report the accrued interest each year, but the deferral option is usually the simpler and more common choice^[4].

There's a bonus for savers with education costs in mind: the interest may be fully tax-free at the federal level if you use the proceeds to pay qualified higher education expenses for yourself, your spouse, or a dependent^[4]. The exclusion covers tuition and fees — not room and board — and you claim it by filing IRS Form 8815^[6]. Married couples filing separately don't qualify^[6].

State and local taxes don't apply at all, which makes I bonds slightly more attractive for residents of high-tax states. Federal estate, gift, and excise taxes still apply, as do state inheritance or estate taxes^[4].

I bonds vs. high-yield savings

The most useful comparison isn't stocks or CDs — it's the top high-yield savings account. As of October 2026, the best savings accounts pay up to 5.00% APY (Axos Bank's six-month introductory rate) with the top no-gimmick standard rate at 4.27% APY from Peak Bank^[7]. That's roughly in line with the I bond's 4.26%, but the two products behave very differently.

A high-yield savings account keeps your money fully liquid and the APY can change at any time. An I bond locks in a fixed rate for 30 years and resets its inflation component by formula, which protects you if inflation re-accelerates — but it also locks your money up for 12 months and charges a three-month interest penalty before year five. For an emergency fund, liquidity wins: keep it in savings. For money you won't need for a year or more and want shielded from inflation, an I bond is a reasonable complement^[1][7].

One more consideration: the I bond's 4.26% is only guaranteed for the first six months. If inflation keeps cooling, the next reset could be lower; if it picks up, the rate rises. That inflation linkage is the entire reason the product exists, so treat it as an inflation hedge first and an income generator second.

FAQ

How do I buy an I bond?

Through TreasuryDirect.gov, the Treasury's official portal. You'll need a Social Security Number, a U.S. bank account for funding, and an email address. Purchases are electronic and can be as small as $25 up to the $10,000 annual limit per person^[3].

Does my 4.26% rate last for 30 years?

No. The 4.26% composite rate applies only for the first six months after issue. After that, your rate resets every six months based on the latest inflation reading, while your 0.90% fixed rate stays locked for the life of the bond^[2].

What happens if I need the money before 12 months?

You can't redeem an I bond at all during the first year^[5]. Between years one and five, you can redeem but you'll forfeit the most recent three months of interest^[1]. After five years there's no penalty.