The new rate for Series I savings bonds took effect Nov. 1 at 5.51 percent, up from 4.26 percent for the prior six months. The figure that matters is the fixed component: 1.40 percent, the highest since November 2006.
By the Numbers
The composite rate applies to bonds issued between Nov. 1, 2026, and April 30, 2027. It combines the new 1.40 percent fixed rate with a variable inflation rate that resets every six months. The fixed rate locks in for the life of the bond, up to 30 years. The previous fixed rate, set in May, was 0.90 percent.
Investors will note the current 5.51 percent yield sits well above most bank certificates of deposit. The national average for a 12-month CD is 1.76 percent; traditional savings accounts average 0.38 percent.
The highest rate in the bond’s history was 9.62 percent from May to October 2022. The November 2023 composite rate was 5.27 percent.
What Drives the Rate
The September Consumer Price Index showed prices climbed 3.7 percent from a year earlier. Gasoline accounted for more than half of the monthly increase, keeping the inflation component elevated.
The inflation rate component changes every six months, on Nov. 1 and May 1. The fixed rate never changes once the bond is purchased.
How I Bonds Work
Series I bonds are government-backed debt securities that earn interest monthly, compounded semiannually. They carry a 30-year final maturity: a 20-year original period followed by a 10-year extended period.
Interest is exempt from state and local income tax. Federal income tax applies, though savers can defer reporting until redemption or report annually. Qualified higher-education expenses may allow tax-free treatment.
Bonds cannot be redeemed in the first 12 months. Cashing out before five years forfeits the most recent three months of interest.
Purchase Limits and Mechanics
Digital purchases via TreasuryDirect are capped at $10,000 per person per calendar year, with a $25 minimum. Gift purchases count toward the recipient’s limit.
The Bottom Line
Long-term savers locking in now secure a 1.40 percent real return above inflation for up to three decades — a level not seen in 20 years. The next rate adjustment is scheduled for May 1, 2027.
Sources
- Inflation-fighting US I bonds have highest fixed rate in 20 years. Here’s what to know
- United States Savings Bonds
- I bonds now pay 5.51%: What to know before you buy
- I Bond Rate Reaches Highest Level Since 2023
- Achieving 2% Inflation! Is That Really Something to Celebrate?｜ＦＰパパのびた
- Corporate coffers swell on semiconductor boom as gap widens between large firms and small
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