Last updated: October 8, 2026. This article is for general information only and is not personal financial, tax, or investment advice. Rates change twice a year, so confirm current figures on TreasuryDirect.gov before you buy.
Series I savings bonds issued from May 1 through October 31, 2026 carry a 0.90% fixed rate and a 4.26% composite rate for the first six months, according to the Treasury’s May 2026 rate announcement as reported by TIPS-focused sites such as Tipswatch and My Money Blog. On November 1, 2026 the Treasury resets the fixed rate for new purchases. If you have been wondering whether to buy this month or wait, this guide explains how the rate works, what the rules are, and the trade-offs, without guessing what the new rate will be.
The Short Answer: What Changes on November 1
Two things matter for a bond you buy today:
- The fixed rate is locked for the life of the bond. A bond issued in October keeps 0.90% for up to 30 years. A bond issued in November gets whatever fixed rate the Treasury announces for November through April.
- The inflation (variable) rate follows inflation and changes every six months for all I bonds. It is not locked at purchase, so it does not depend on whether you buy in October or November.
That is why the fixed rate is the part that separates an October purchase from a November one. Nobody knows the new fixed rate in advance. The Treasury does not publish a formula, so any forecast is an estimate. My Money Blog has said it will publish its early prediction for the November rate in mid-October, which is worth checking if you want a rough idea.
How I Bond Interest Works
An I bond earns a composite rate built from the fixed rate and the inflation rate. The composite cannot go below 0%, which means the value of an I bond does not fall. For issues from May to October 2026, the composite for the first six months is 4.26%, with an inflation component of roughly 3.3% annualized and the 0.90% fixed rate on top. After six months, the composite is recalculated using the then-current inflation rate and your unchanged fixed rate.
Interest is added monthly and compounds every six months. A simple example: $5,000 earning a 4.26% composite for the first six months earns about 2.13% over that half-year, or roughly $106.50, before any later changes. Future six-month periods will use different composite rates, so the first-period figure is not a prediction of long-term returns.
Rules and Limits to Know Before You Buy
| Rule | What it means |
|---|---|
| Annual purchase limit | Up to $10,000 in electronic I bonds per person per calendar year through TreasuryDirect. Redeeming bonds does not restore the limit. |
| Minimum holding period | You cannot cash in an I bond during the first 12 months. |
| Early redemption penalty | Cash out before five years and you forfeit the last three months of interest. After five years there is no penalty. |
| Maximum term | Bonds earn interest for up to 30 years. |
| Where to buy | TreasuryDirect.gov, the Treasury’s official site. Be wary of lookalike sites and anyone offering to buy “for you.” |
I bond interest is subject to federal income tax but exempt from state and local income tax. You can usually choose to report interest each year or defer it until you redeem the bond or it matures. If you are unsure which suits you, a tax professional can help.
Buy in October or Wait for November?
There is no way to know which rate will be better, but you can frame the decision:
- Decide whether an I bond fits your money at all. Because of the one-year lock, I bonds are for money you will not need for at least 12 months, ideally five years or more. Keep your emergency fund somewhere you can reach it.
- Compare against alternatives. A high-yield savings account or a certificate of deposit may pay a competitive rate with fewer restrictions. Our guides to how a high-yield savings account works and how a certificate of deposit works cover those options.
- Know the trade-off. Buying before October 31 locks the known 0.90% fixed rate. Waiting until November means accepting an unknown fixed rate that could be higher or lower. The inflation component resets for everyone either way.
- Mind the month-end. I bonds earn interest as of the first day of the month they are issued, so purchases made late in a month still receive that month’s interest. If you plan to buy in October, do not leave it to the final hours, since the site may be busy and you need time to complete verification.
- Use your annual limit wisely. You can buy in October for this calendar year and again in January for next year without breaking the $10,000 annual cap.
Interest rates elsewhere also move with the Federal Reserve. For background on how the central bank’s decisions affect savings and borrowing, see our explainer on what the latest Fed decision means for your savings, debt, and mortgage.
Common Mistakes
- Treating a rate headline as a guarantee. The 4.26% composite applies to the first six months only.
- Locking up money you may need. The one-year lock and three-month penalty can surprise people.
- Using unofficial sellers. Buy only through TreasuryDirect.gov.
- Forgetting the account setup. Opening a TreasuryDirect account requires identity verification and a linked bank account, so allow time.
Frequently Asked Questions
What is the current I bond fixed rate?
For bonds issued May 1 through October 31, 2026, the fixed rate is 0.90%. A new fixed rate applies to bonds issued from November 1, 2026.
When will the new I bond rate be announced?
The Treasury updates I bond rates on November 1. Check TreasuryDirect.gov on that date for the official figures.
How much can I invest in I bonds?
Up to $10,000 in electronic I bonds per person per calendar year through TreasuryDirect.
Can I lose money in an I bond?
The composite rate cannot go below zero, so the bond’s value does not decline. If you redeem within five years, you give up three months of interest, which can reduce what you take home compared with holding longer.
Is the interest taxable?
It is subject to federal income tax and exempt from state and local income tax. Special rules may apply for qualified education expenses.
Sources: U.S. Department of the Treasury / TreasuryDirect, May 2026 I bond rate announcement; Tipswatch, “Q&A on I Bonds” (updated May 1, 2026); My Money Blog, savings bond rate update (May 3, 2026). Rates and rules are as reported on those dates and may change.
