I Bonds 2026: Current Rate, Rules and Calculator
I Bonds 2026: Current I Bond Rate, How Series I Savings Bonds Work and a Calculator
The fixed and inflation parts of the rate, the formula Treasury uses, the $10,000 limit, the one-year lock and three-month penalty, tax treatment, and a calculator, with an update due on November 1.
I Bonds are U.S. savings bonds whose interest rate combines a fixed rate that never changes and an inflation rate that resets every six months. For bonds issued from May through October 2026, Treasury set the fixed rate at 0.90% and the semiannual inflation rate at 1.67%, which gives a 4.26% composite rate. You cannot cash a bond in its first 12 months, and cashing before five years forfeits the last three months of interest. Electronic purchases are limited to $10,000 per person per calendar year. Federal tax is deferred until you cash out, and the interest is exempt from state income tax. New rates for bonds issued from November are due on November 1, 2026.
When prices rise, a savings account that pays a fixed rate can fall behind. I Bonds, issued by the U.S. Treasury, were designed to address that by adding an inflation-based component to the interest rate. They became widely known during the 2022 inflation surge, and interest has stayed steady since because their rate is reset twice a year. This guide explains how the rate is built, what the current numbers are, the rules that limit the product, and a calculator so you can see what a given purchase could be worth under assumptions you choose.
1. What I Bonds Are
A Series I savings bond is a Treasury security you buy at face value and hold while interest accrues. Unlike a typical bond it does not pay interest out; the interest is added to the bond's value, compounds twice a year and is paid when you redeem. It earns interest for up to 30 years, then stops. You cannot hold I Bonds in a tax-deferred account such as an IRA, and you cannot open a joint TreasuryDirect account, so couples each use their own, according to Tipswatch's Q&A, which summarizes TreasuryDirect rules.
2. The I Bond Rate Formula
Every I Bond has a composite rate made of two pieces, as described on the Treasury's rates page:
- The fixed rate is announced on May 1 and November 1 and applies for the life of any bond issued in the following six months.
- The inflation rate is also set on May 1 and November 1, based on the non-seasonally adjusted Consumer Price Index for All Urban Consumers (CPI-U), including food and energy, and changes every six months.
The two are combined as: fixed rate + (2 × semiannual inflation rate) + (fixed rate × semiannual inflation rate). The composite rate cannot fall below zero even with deflation, although deflation can push it below the fixed rate.
Worked example with the May 2026 numbers. Fixed rate 0.90%, semiannual inflation 1.67%: 0.90% + 2 × 1.67% + (0.90% × 1.67%) = 0.90% + 3.34% + 0.015% = 4.255%, which Treasury publishes as 4.26%. The 1.67% reflects the CPI-U change from September 2025 to March 2026. Because the inflation piece is doubled, it is an annualized figure of 3.34%.
3. Current Rates and Reset Timing
The Treasury's May 1, 2026 release set these rates for bonds issued from May 2026 through October 2026:
| Component | Rate | What it means |
|---|---|---|
| Fixed rate | 0.90% | Locked for the life of a bond issued in this window |
| Semiannual inflation rate | 1.67% | CPI-U change, September 2025 to March 2026 |
| Composite rate | 4.26% | Annual rate paid for the first six months |
One point trips people up: your bond's rate does not change on November 1 for everyone. The inflation component resets every six months from your issue month. The Treasury's example: a bond issued in January resets on July 1 and January 1; a bond issued in May resets on November 1 and May 1. The fixed rate stays the same for the whole life of that bond.
4. The Rules at a Glance
| Rule | What applies |
|---|---|
| Purchase limit | $10,000 per person per calendar year, electronic, at TreasuryDirect |
| Paper bonds from tax refunds | Ended January 1, 2025 |
| Minimum hold | 12 months; you cannot redeem sooner |
| Early redemption | Before five years, you forfeit the last three months of interest |
| Maturity | Interest stops at 30 years |
| Compounding | Interest accrues monthly and compounds semiannually |
| Rate floor | The composite rate is never below 0.00% |
| Partial redemption | At least $25 must remain in the account |
The purchase and redemption details above come from a published Q&A that summarizes TreasuryDirect's terms, and the rate rules come from Treasury's own pages. TreasuryDirect's site restricts automated page reading, so confirm the current limits at treasurydirect.gov before you buy.
5. I Bond Calculator
Enter a purchase amount, a fixed rate and a semiannual inflation rate, and pick how long you will hold. The defaults are the May 2026 rates. Change the inflation rate to see how sensitive the outcome is, since future inflation resets are unknown. The result is the redemption value after the three-month interest penalty when you cash in before five years.
🧮 I Bond Calculator
| Held for | Redemption value | Interest |
|---|
At the defaults, a $10,000 purchase redeemed after exactly one year is worth about $10,321.77 once the penalty is applied, and about $12,346.20 after five years. If you set the inflation rate to a negative number, the composite rate stops at zero, as Treasury's rules provide.
6. Taxes on I Bond Interest
- Federal: tax is deferred until you redeem the bond or it reaches 30 years, whichever comes first. You may choose to report the interest each year instead.
- State and local: the interest is exempt from state income tax.
- Education: interest used for qualified higher education expenses may be federally tax-free if conditions are met, including an income limit set by the IRS. See IRS Publication 970 and our guide to 529 college savings plans.
- The penalty: the forfeited three months of interest is not reported as interest on Form 1099-INT.
To see how the interest could stack on your other income, use our tax bracket calculator.
7. I Bonds Compared With Other Safe Options
I Bonds sit among several low-risk choices, and each answers a slightly different question. The comparison below is about structure, not about which is best:
| Feature | I Bonds | Treasury bills and notes | Savings or money market account |
|---|---|---|---|
| Inflation component | Built into the rate | No (TIPS are the inflation-linked version) | No |
| Access | Locked 12 months, then penalty to 5 years | Can be sold in the market | Usually immediate |
| Annual limit | $10,000 per person | Much higher | No Treasury limit |
| State income tax | Exempt | Exempt | Taxable |
| Rate resets | Every six months from issue | Fixed at purchase | Variable |
For how Treasury yields and credit markets are moving more broadly, see our fixed income and Treasury yields guide. Money you may need quickly belongs in a more liquid place, which is the subject of our emergency fund guide.
8. Are I Bonds Worth It? Both Sides
Readers often search this question, and the honest answer depends on your situation. Here is how the case is usually made on each side.
Points people make in favor:
- The rate includes inflation, so the bond is meant to keep up with rising prices.
- The composite rate never goes below zero, and the principal does not fall.
- Interest is exempt from state income tax and federal tax is deferred.
- A fixed rate above zero, if you can get one, adds a real return on top of inflation for the life of that bond.
Points people make against:
- The $10,000 yearly cap limits how much anyone can hold.
- Money is locked for a year and carries a three-month interest penalty before five years.
- The inflation component resets every six months and may fall; when inflation cools, the composite rate drops.
- A 0.90% fixed rate is modest, so over long periods the return depends on future inflation.
- Other safe options can pay competitive rates with easier access at certain times.
Neither list settles the question. What matters is how long you can leave the money untouched and what else it could do in the meantime.
9. The November 1 Reset
Treasury announces a new fixed rate and a new semiannual inflation rate on November 1, for bonds issued from November 2026 through April 2027. A few things follow from the rules above:
- The new fixed rate applies only to bonds issued after the announcement. A bond bought before November 1 keeps 0.90% for its whole life.
- The inflation component of an existing bond changes on its own six-month schedule, not all on November 1.
- The composite rate for the next window depends on the CPI-U change from March to September 2026, which can be checked against the Bureau of Labor Statistics data. Forecasts are estimates until Treasury publishes.
Our earlier guide on the 2027 Social Security COLA projection uses a related CPI measure and explains how the index is built. We will log the actual November 1 numbers in the archive below.
10. How People Buy Them
- Open a TreasuryDirect account. You need a Social Security number, a U.S. bank account and identity verification.
- Choose the purchase in "BuyDirect." Pick Series I and enter an amount within your $10,000 limit for the calendar year.
- Keep records. Note the issue month, because it sets your six-month reset schedule.
- Plan the exit. Remember the 12-month lock, the three-month penalty before five years and your tax reporting choice.
11. Checklist and Common Mistakes
- Confusing the rate. The 4.26% is for new purchases in the May to October 2026 window and is an annualized composite, not a guaranteed future yield.
- Ignoring the lock. Money you may need in the first year does not belong here.
- Forgetting reset dates. Your bond's rate resets from its own issue month.
- Overlooking the cap. The $10,000 limit is per person per calendar year.
- Assuming the penalty is tax-reported. The forfeited three months are not reported on Form 1099-INT.
- Treating a calculator as a forecast. Our tool assumes a constant inflation rate, which will not happen.
12. Frequently Asked Questions
For bonds issued from May 2026 through October 2026, Treasury set a 0.90% fixed rate, a 1.67% semiannual inflation rate and a 4.26% composite rate. New rates for bonds issued from November 2026 are due on November 1, 2026.
Treasury combines the rates as fixed rate plus two times the semiannual inflation rate plus the fixed rate times the semiannual inflation rate. With 0.90% and 1.67% that equals about 4.255%, published as 4.26%.
Electronic I Bonds at TreasuryDirect are limited to $10,000 per person per calendar year. Paper I Bonds bought with tax refunds ended on January 1, 2025.
You cannot redeem an I Bond during the first 12 months. If you cash it before five years, you forfeit the last three months of interest. After five years there is no penalty.
The inflation part resets every six months from your bond's issue month, not for everyone on the same day. A bond issued in May resets on November 1 and May 1, while one issued in January resets on July 1 and January 1. The fixed rate stays the same for the bond's life.
Federal tax is deferred until you redeem the bond or it reaches 30 years, and the interest is exempt from state income tax. Interest used for qualified higher education may be federally tax-free if IRS conditions are met.
Treasury's rules set the composite rate at no lower than zero, so deflation does not reduce the bond's value. Cashing out early can cost three months of interest, and money is locked for the first 12 months.
No. According to a Q&A summarizing TreasuryDirect rules, I Bonds cannot be held in a tax-deferred account such as an IRA, and joint TreasuryDirect accounts are not available.
Treasury bonds are marketable securities that pay a fixed coupon twice a year and can be sold before maturity at a market price. Series I savings bonds are not marketable, are bought directly from the Treasury, add interest to the bond's value and combine a fixed rate with an inflation-based rate. Each can suit different goals, so compare the rules rather than the names.
13. Update Archive
✅ Key Takeaways
- The May–October 2026 composite rate is 4.26%: 0.90% fixed plus a 1.67% semiannual inflation rate.
- The formula is fixed + 2 × inflation + (fixed × inflation), never below zero.
- Limit: $10,000 per person per calendar year, electronic. Lock: 12 months. Penalty before 5 years: three months of interest.
- Federal tax is deferred and state tax does not apply.
- The inflation part resets every six months from your issue month; new rates are due November 1.
- A calculator is an illustration, not a forecast.
Official Resources & Further Reading
📎 Sources & References
- U.S. Department of the Treasury, Series I and EE savings bond rates announced May 1, 2026
- Treasury, I Bonds Interest Rates (formula, announcement dates, reset schedule, early redemption penalty)
- Tipswatch, Q&A on I Bonds (updated May 1, 2026; summarizes TreasuryDirect purchase limit, hold, tax and account rules)
- Internal Revenue Service, Publication 970, Tax Benefits for Education