Series I savings bonds are currently offering a 4.26% composite annualized rate for all electronic bonds issued through October 31, 2026.
This rate provides a fixed option for savers as market interest rates and inflation levels remain unpredictable, according to TreasuryDirect data.
The 4.26% composite rate consists of a 0.90% fixed rate and a variable inflation-linked component. While the inflation portion resets every six months based on changes in the Consumer Price Index for All Urban Consumers (CPI-U), the 0.90% fixed rate remains with the bond for its entire 30-year lifespan.
The current inflation component is derived from a 1.67% increase in the CPI-U recorded between September 2025 and March 2026. This figure translates to a 3.34% annualized inflation rate, which the U.S. Treasury combines with the fixed rate to reach the current composite total.
Treasury updates I bond rates
The U.S. Treasury established a new composite rate for bonds issued beginning November 1. The current 4.26% rate applies specifically to electronic I bonds purchased during the six-month window from May through October 2026.
A buyer who purchases a bond in September 2026 will receive the 4.26% composite rate for six months from their specific issue date. The rate will then shift to a new inflation component once the next six-month cycle begins.
The 0.90% fixed component serves as a hedge for long-term holders. Even if the variable inflation adjustment decreases in future cycles, the bond retains this fixed rate, ensuring the total return remains above measured inflation. Because the combined rate cannot fall below zero, the overall redemption value of the bond will not decline.
Buying I bonds requires following purchase limits and liquidity rules
Individuals are generally permitted to purchase up to $10,000 in electronic I bonds per calendar year through the TreasuryDirect system. Additional amounts may be acquired via paper I bonds if a federal tax refund is applied toward the purchase, subject to IRS and Treasury regulations.
I bonds are registered securities and cannot be traded on brokerage exchanges. Owners must redeem them through TreasuryDirect or, in the case of eligible paper bonds, through participating financial institutions.
Strict liquidity rules apply to these assets. I bonds cannot be redeemed within the first 12 months of issuance, except under specific federally declared disaster circumstances. Redeeming a bond before it has been held for five years results in a penalty equal to the last three months of interest earned.
These restrictions mean I bonds are not intended to serve as primary emergency funds for immediate costs like medical bills or rent.
Comparison with other savings vehicles
The utility of an I bond depends on the investor’s timeline and need for access to cash. High-yield savings accounts provide daily liquidity but feature rates that fluctuate frequently. Certificates of deposit (CDs) may offer guaranteed rates but often impose early-withdrawal penalties.
Treasury bills offer market-based yields and short maturities, though they lack the specific inflation protection built into the I bond structure. I bonds are designed to preserve purchasing power over longer periods and may suit goals such as college funds or retirement portfolios.
Unlike many other savings products, I bond interest is not paid out monthly. Instead, the interest accrues within the bond and is compounded semiannually until the bond is redeemed. While federal income tax can be deferred until redemption or maturity, owners have the option to report interest annually.
The U.S. Treasury was scheduled to release the new composite rate for November 1 issuances following the next inflation calculation.
