Series I bonds are government-backed savings bonds that offer a low-risk way to invest while guarding against inflation. Their interest rate is a combination of a fixed rate, which remains the same for the life of the bond, and a variable rate tied to inflation, which adjusts every six months based on changes in the Consumer Price Index for all Urban Consumers (CPI-U).

Latest Rate Breakdown

The Treasury updates I bond rates twice each year, on May 1 and November 1. For the current cycle, the Treasury set the fixed rate at 1.10%, alongside a semiannual inflation variable rate of 1.43%, based on the CPI-U increase from 315.301 in September 2024 to 319.799 in March 2025 – a six-month rise of 1.43%.

Using the Treasury’s official formula:

Composite rate = fixed rate + (2 × semiannual inflation rate) + (fixed rate × semiannual inflation rate)

Plugging in the current figures:

0.0110 + (2 × 0.0143) + (0.0110 × 0.0143) = 0.0398 → Composite rate: 3.98%

Buying I Bonds

Electronic I bonds can be purchased through TreasuryDirect.gov in any amount from $25 up to $10,000 per person each calendar year. As of 2025, the option to buy an additional $5,000 in paper I bonds through federal tax refunds has been discontinued.

I bonds must be held for at least 12 months. If redeemed within the first five years, investors lose the last three months of interest.

Series I bonds, a type of savings bond issued and backed by the U.S. government, provide a low-risk investment option while also offering protection against inflation.

Latest Rate

The Treasury updates the rates for I bonds twice a year, on May 1 and November 1. These rates consist of a fixed rate and a variable, inflation-adjusted rate, which together form the composite rate. The inflation component adjusts every six months, while the fixed rate stays the same for the bond’s 30-year duration.

For the latest composite rate, the Treasury announced a fixed rate of 1.3% for the second time in a row, the highest since it was set at this level on May 1, 2007, along with an annualized inflation-adjusted rate of 2.96%, determined by the Consumer Price Index for all Urban Consumers (CPI-U). The inflation rate component is always publicly available in advance and adjusts every six months. However, the Treasury does not disclose the methodology for determining the fixed rate component of an I bond.

The latest annualized inflation-adjusted rate of 2.96% was determined based on the increase in the CPI-U from 307.789 in September 2023 to 312.332 in March 2024, reflecting a six-month change of 1.48%.

The Treasury’s formula for calculating an I bond’s overall composite rate for any six-month period is:

I bond composite rate formula: [fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)]

Plugging in the numbers for the latest period, [0.0130 + (2 x 0.0148) + (0.0130 x 0.0148)], calculates to 0.0428 and the composite rate of 4.28%.

Buying I Bonds

To purchase an electronic I bond, you need to establish an account at treasurydirect.gov. These bonds are available in amounts ranging from $25 to $10,000. The annual limits include $10,000 in electronic I bonds per Social Security Number or Employer Identification Number, and up to $5,000 in paper I bonds using a tax refund.

Investors cannot redeem their I bonds within the first 12 months, and they must forfeit three months’ worth of interest if the bonds are cashed before five years.

What also grabbed the attention of many investors was the disclosure that the fixed rate component will be 0.9%, the highest it has been in 16 years.

"Expectations had it closer to 0.6%," MarketWatch quoted Ken Tumin, founder of depositaccounts.com. "Even though the I-bond inflation rate is much lower than the last three six-month periods, this new fixed rate makes it more attractive for those who plan to hold on to the I-bond for the long term."

I bonds, which are a type of savings bond issued and backed by the U.S. government, offer not only a low-risk investment option but also protection from inflation.

Latest Rate

Twice a year, on May 1 and November 1, the Treasury resets the rates for I bonds. These rates are composed of both a fixed rate and a variable, inflation-adjusted rate, resulting in an overall composite rate. The inflation component changes every six months, whereas the fixed rate remains constant throughout the bond’s 30-year lifespan.

For the most recent composite rate, the Treasury announced the fixed rate of 0.9%, which is the highest since it was 1.2% in November 2007, and an inflation-adjusted rate of 3.38% annualized, which is determined by the Consumer Price Index for all Urban Consumers (CPI-U). The inflation rate component is always publicly available ahead of time and changes every six months. However, the Treasury does not disclose its methodology for determining the fixed rate component of an I bond.

The latest inflation-adjusted rate of 3.38% annualized was determined based on the increase in the CPI-U from 296.808 in September 2022 to 301.836 in March 2023, resulting in a six-month change of 1.69%.

The Treasury’s formula to calculate an I bond’s overall composite rate for any six-month period is:

I bond composite rate formula: [fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)]

Plugging in the numbers for the latest period, [0.0090 + (2 x 0.0169) + (0.0090 x 0.0169)], calculates to 0.043 and the composite rate of 4.3%.

Buying I Bonds

To purchase an electronic I bond, establish an account at treasurydirect.gov. They are available in amounts from $25 to $10,000. Calendar year limits include $10,000 in electronic I bounds per Social Security Number or Employer Identification Number and up to $5,000 in paper I bounds with a tax refund.

Investors cannot redeem their I bonds within the first 12 months, and they must sacrifice 3 months’ worth of interest if cashed before five years.

I bonds are U.S. government-issued savings bonds that offer returns based on a fixed interest rate that remains constant for the life of the bond, along with a variable rate that adjusts semi-annually to keep up with inflation.

Currently, newly purchased I bonds have combined or composite rate of 6.89%, which consists of an inflation-adjusted variable rate of 6.49% and a fixed rate of 0.4%. The question now is whether the fixed rate for I bond purchases during the six-month period starting in May will be enough to somewhat offset the decrease in the annualized variable rate of 3.38% and generate sufficient investment interest.

Demand for I bonds has been high over the past year and a half due to exceptional interest rates that have reached record levels:

• 7.12% through April 2022,
• 9.62% through October 2022, and
• 6.89% through April 2023.

I bonds at 3.38% are less attractive compared to these rates, for sure.

However, the fixed rate component should also be considered. If the fixed rate is sufficiently high, bonds purchased after April could be more appealing to investors with a long-term perspective. Unlike the variable rate portion that changes semiannually, the fixed rate component remains the same for the bond’s entire life.

I bonds issued today earn the mentioned 6.89% for six months, which includes a fixed rate of 0.4% that lasts throughout the bond’s life. In the past five six-month bond rate setting periods, the fixed component was 0%. Now, the question remains: what will the next fixed rate setting be? Will it be 0%, fall below or remain at 0.4%, or increase?

Unfortunately, the Treasury Department does not disclose this rate in advance, making it more difficult for investors to plan ahead.

Calculating the Overall Combined Rate

When making a purchasing decision — whether to buy now, wait until May 1, or buy now and later (up to the annual limit) — it can be helpful to understand how the Treasury calculates an I bond’s overall composite rate. The formula for this calculation is:

I bond composite rate formula: [fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)]

The current semiannual inflation rate is 3.24%, which was determined by the increase in CPI-U from 287.504 in March 2022 to 296.808 in September 2022. The upcoming semiannual inflation rate is 1.69%, which was determined by the increase in CPI-U from 296.808 in September 2022 to 301.836 in March 2023. For reference, the CPI-U, or Consumer Price Index for Urban Consumers, is a closely watched inflation gauge that measures what urban consumers paid over time for a variety of goods and services.

How to Purchase Series I Bonds

Buyers can lock in the current 6.89% annual return for six months by purchasing I bonds before May 1. As the 1st falls on a Monday, those planning to buy should do so before April 27.

To purchase an electronic I bond, establish an account at treasurydirect.gov. They are available in amounts from $25 to $10,000. Calendar year limits include $10,000 in electronic I bounds per Social Security Number or Employer Identification Number and up to $5,000 in paper I bounds with a tax refund.

Investors cannot redeem their I bonds within the first 12 months, and they must sacrifice 3 months’ worth of interest if cashed before five years.

I bonds are one of the types of savings bond issued and backed by the U.S. government. They are not only a low-risk investment option, but they are also protected from inflation.

The Treasury sets I bond rates twice a year — on May 1 and on November 1. These overall interest or composite rates are a combination of fixed rates and inflation rates. Until now, the fixed rate was set at 0% for five straight six-month periods.

Latest Rate

For the most recent composite rate, the Treasury announced a fixed rate of 0.4%, which applies for the 30-year life of the savings bond, and an inflation rate of 6.48%, which is determined by Consumer Price Index for all Urban Consumers (CPI-U). The inflation rate component is always publicly available ahead of time and it changes every six months. The Treasury does not reveal its methodology for setting an I bond’s fixed rate component.

The latest inflation rate of 6.48% was determined by the CPI-U increase from 287.504 in March 2022 to 296.808 in September 2022, which calculates to an increase of 3.24%.

The Treasury’s formula to calculate an I bond’s overall composite rate for any six-month period is:

I bond composite rate formula: [fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)]

Plugging in the numbers for the latest period, [0.0040 + (2 x 0.0324) + (0.0040 x 0.0324)], calculates to 0.0689 and the composite rate of 6.89%.

Buying I Bonds

To purchase an electronic I bond, establish an account at treasurydirect.gov. They are available in amounts from $25 to $10,000. Calendar year limits include $10,000 in electronic I bounds per Social Security Number or Employer Identification Number and up to $5,000 in paper I bounds with a tax refund.

Investors cannot redeem their I bonds within the first 12 months, and they must sacrifice 3 months’ worth of interest if cashed before five years.

Rates on U.S. Treasury Series I bonds will decline soon, the latest inflation data shows.

Inflation continues to run hot but in recent months it has plodded along at a steadier pace compared to the hurdling month-over-month advances made toward the end of last year and the start of this year.

As such, the interest rate for I bonds is poised for a fall in November to 6.47% from the current record rate of 9.62%.

Tied to inflation, Americans have poured over $22 billion into I bonds this year because of the more attractive rates and no-risk returns.

Rates for I bonds change twice a year — once in May and then again in November. Interest accrues monthly and compounds semiannually.

The overall interest rate for an I bond is a combination of a fixed rate and a variable rate tethered to inflation. The Treasury sets the former and the latter is based on changes in the Consumer Price Index (CPI-U). The CPI is a broad measure of what Americans pay for everyday items ranging from eggs to electricity.

The fixed component is very likely to be 0% in the November reset, like it has been since 2020.

The inflation component for the next six-month period is now known as it is found using the change in CPIs from March 2022 to September 2022. (Inflation data for September was released Oct. 13.)

The CPIs for those two months are 287.504 and 296.808, respectively, which represents a 3.236% increase. This increase is multiplied by two and calculates to 6.47% — the expected next I bond rate, provided, of course, the Treasury’s fixed rate remains at 0%.

Update: The announced rate was 6.89% as it unexpectedly included a fixed rate of 0.40%.

Here is the actual Treasury formula to calculate an I bond’s overall rate for a new six-month period:

I bond composite rate formula: [fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)]

The current 9.62% rate is available through Oct. 28, according to TreasuryDirect.gov where I bonds are purchased. Those bought in October lock in the 9.62% rate for the six months through March. Then in April, they would adjust to the expected 6.47% ⁠rate.