The U.S. Treasury Department announced the new interest rates for the Series I bonds.
From November 1st to April 30th, newly purchased I-bonds will pay an annual interest rate of 5.51%, which is higher than the 4.26% yield rate applicable at the time of purchase on October 31st.
The new interest rate includes a floating component of 4.08%, which is calculated based on inflation data, as well as a fixed component of 1.40%. The Ministry of Finance stated that the fixed interest rate has been raised from 0.90% announced in April and represents the highest rate since 2006.
The Ministry of Finance stated that after the merger, the comprehensive interest rate of I-bonds rounded to five decimal places is 5.51%.
During the peak inflation period after the pandemic, the interest rate on I-bonds reached a record high of 9.62% in May 2022, with investors pouring millions of dollars into these government-backed, virtually risk-free assets.
As inflation cools down and the interest rates on I-bonds decline, many short-term investors have redeemed their I-bonds. However, experts suggest that as inflation drives interest rates on I-bonds back up, investors may return to them again.
Tipswatch.com Founder David Enna stated: “I Bonds are much more attractive at this point in time.” This website tracks the inflation-protected securities of national debt (TIPS) and the interest rates of I Bonds.
The U.S. Bureau of Labor Statistics reported in October that in September 2026, the Consumer Price Index ( CPI ) rose 3.7% year-on-year, higher than the 3.4% annual growth rate in August.
Economists say that some of the higher inflation in September came from the war in Iran, which pushed up the costs of gasoline and energy. US President Donald Trump's tariffs, new artificial intelligence data centers, and tourism demand have also been contributing to rising prices.
Consumers expect that rising inflation will continue. A survey released by the Federal Reserve of New York at the beginning of October showed that inflation expectations for one year in September rose to 3.9%, the highest level in over three years.
How do I bond interest rates work?
The interest rate of I-bonds consists of two parts: floating and fixed. The Ministry of Finance adjusts it every six months, in May and November.
The floating interest rate is linked to inflation – using the percentage change in the Consumer Price Index over a six-month period – and it remains unchanged for six months after your purchase, unaffected by the next update from the Ministry of Finance.
Your fixed interest rate will not change after purchasing I-bonds. The Ministry of Finance has not disclosed how the fixed interest rate adjustments are calculated, making it even more difficult to predict.
Some experts believe that the fixed interest rate of I-bonds may be affected by the actual yield of the five-year TIPS, that is, the yield adjusted for inflation. The founder of DepositQuest.com, Ken Tumin, stated that the website tracks the interest rates of I-bonds as well as other deposit accounts.
Tumin said, 'There is some uncertainty involved here.'
How does this change affect current I-bond investors?
If you currently hold I-bonds, the interest rate updates will be based on your original purchase date, following a six-month timeline.
After holding I-bonds for six months, the floating yield will change to the next announced interest rate, but the fixed interest rate remains unchanged throughout the entire period of your holding of that asset.
For example, suppose you purchased I-bonds in March at a time when the floating rate was still 3.12% and the fixed rate was 0.9%. Six months later, the floating rate will change to 3.34% as announced in April 2026, but your fixed rate will still remain at 0.9%.
The maximum term of I-bonds is 30 years, or it can be shorter if redeemed before maturity. However, they cannot be cashed in for at least one year after purchase. If redeemed within five years, you will lose the interest for the last three months.
