Last updated: November 1, 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.
The Treasury has set the new Series I savings bond rates. For bonds issued from November 1, 2026 through April 30, 2027, the fixed rate is 1.40% and the composite rate is 5.51% for the first six months, according to the announcement of October 30, 2026 as reported by Tipswatch. That fixed rate is higher than the 0.90% on bonds issued from May through October 2026. This guide explains how the numbers fit together, the rules you need to know, and how to decide whether an I bond belongs in your savings plan.
The Short Answer: What the New Rates Mean
- Fixed rate: 1.40%. A bond issued from November 1 locks this rate for as long as you hold it, up to 30 years.
- Inflation component: about 4.08% annualized. Tipswatch reports this is based on 2.04% inflation between April and September 2026. It is not locked, and it is recalculated every six months for all I bonds.
- Composite rate: 5.51%. This is the annualized rate your bond earns during its first six months. Later six-month periods use the inflation rate in effect then, so 5.51% is not a long-term forecast.
The composite rate is calculated as the fixed rate plus twice the semiannual inflation rate, plus a small cross term. With a 1.40% fixed rate and 2.04% semiannual inflation, that works out to roughly 5.51%.
How I Bond Interest Works
An I bond earns interest from the first day of the month in which it is issued. Interest is added monthly and compounds every six months. The composite rate cannot fall below 0%, so the value of an I bond does not decline.
A simple example: $5,000 earning a 5.51% composite for the first six months earns about 2.755% over that half-year, or roughly $137.75, before any later rate changes. After six months, your bond’s composite rate is recalculated from your unchanged 1.40% fixed rate and the then-current inflation rate, which could be higher or lower.
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. A tax professional can help you decide which suits you.
Should You Buy an I Bond Now?
No one can say what is best for your situation, 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.
- Look at the fixed rate, not just the headline. The 5.51% composite will change after six months. The 1.40% fixed rate is the part that stays with the bond, which matters most if you plan to hold for years.
- Use your annual limit wisely. You can buy now for this calendar year and again in January for next year without breaking the $10,000 cap.
- Allow time for setup. Opening a TreasuryDirect account requires identity verification and a linked bank account.
Interest rates elsewhere also move with the Federal Reserve. For background, see our explainer on what the latest Fed decision means for your savings, debt, and mortgage.
What About Bonds You Already Own?
Bonds issued earlier keep the fixed rate they were bought with, such as 0.90% for May through October 2026 issues. Their composite rate changes on their own six-month schedule, based on the month they were issued, using the new inflation component. Check your TreasuryDirect account for your bond’s current rate.
Common Mistakes
- Treating a rate headline as a guarantee. The 5.51% 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 purchase limit. The $10,000 cap is per person per calendar year.
Frequently Asked Questions
What is the current I bond fixed rate?
For bonds issued November 1, 2026 through April 30, 2027, the fixed rate is 1.40%. Bonds issued May 1 through October 31, 2026 carry 0.90%.
What is the new I bond composite rate?
5.51% for the first six months for bonds issued from November 2026 through April 2027, as reported by Tipswatch from the Treasury’s October 30, 2026 announcement.
When is the next I bond rate change?
The Treasury announces new rates twice a year, around May 1 and November 1. Confirm on TreasuryDirect.gov.
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: Tipswatch, “The I Bond’s new fixed rate should be 1.40%. However…” (October 25, 2026, updated October 30, 2026 with the Treasury’s announcement); U.S. Department of the Treasury / TreasuryDirect I bond rate pages; fedratecalc.com I bond rate summary. Rates and rules are as reported on those dates and may change.
