Rates for Series I Bonds

Series I savings bonds, or I bonds, purchased through April 2024 will earn 5.27%, TreasuryDirect® announced November 1, 2023. This rate includes an inflation component of 3.94% annualized and a fixed rate of 1.30%, with the latter remaining constant throughout the bond’s life. In comparison, the previous composite rate was 4.30%, comprising an annualized inflation-adjusted rate of 3.40% and a fixed rate of 0.90%.

The revised rate may not appeal equally to all investors. It could be less attractive to those with short-term investment goals and more appealing to those with a long-term investment horizon.

Inflation-Adjusting Asset and Annual Limits

I bonds are a type of inflation-adjusted U.S. savings bonds that can be purchased electronically on TreasuryDirect for as little as $25.

They earn interest for up to 30 years and are nearly risk-free, backed by the U.S. government. After a holding period of 12 months, they can be cashed out, but redeeming them before 5 years will result in forfeiture of 3 months’ interest. The bond’s initial rate applies to the first 6 months after purchase, with semiannual compounding thereafter.

"Every six months from the bond’s issue date, interest the bond earned in the six previous months is added to the bond’s principal value, creating a new principal value. Interest is then earned on the new principal," TreasuryDirect describes.

While individuals are subject to an annual purchase limit of $10,000, they can also receive an extra $5,000 in paper I bonds each calendar year through IRS Form 8888 as part of a tax refund. For more information on using tax refunds to buy I bonds, refer to this Wall Street Journal article and IRS document.

Businesses, trusts, and estates are also eligible to purchase I bonds, with an annual limit of $10,000 per entity.

How the 5.27% Rate was Adjusted for Inflation

The latest 5.27% rate includes a combination of:

• a fixed rate of 1.30% that remains the same throughout the life of the bond and
• a variable inflation rate that changes two times every year (in May and in November) with the latest calculating to 3.94% annualized

An I bond’s actual rate of interest (its earnings or composite rate) is calculated using the following formula:

[fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)] = Composite rate

As an example, using the data for a new I bond issued from November 2023 through April 2024, the formula shows:

[1.30% + (2 x 1.97%) + (1.30% x 1.97%)] = 5.27%

How an I Bond’s Semiannual Inflation Rate is Determined

One question that may come to mind is how the Treasury determined the semiannual inflation rate of 1.97% for the period between November 2023 and April 2024. Additionally, investors may wonder how the Treasury will determine the semiannual inflation rate for the upcoming period between May and October 2024.

The inflation component of an I bond’s rate is based on the Consumer Price Index for all Urban Consumers (CPI-U). The CPI is a broad measure of what consumers living in urban U.S. cities pay for a wide range of goods and services — items like food, cars, gas, and healthcare. The U.S. Bureau of Labor Statistics (BLS) publishes the CPI twelve times a year. Each release includes a bevy of data (read their most recent release), including the latest inflation rates.

For I bond purchases in the November 2023 through April 2024 period, the Treasury calculates the change in CPI from March 2023 to September 2023. Looking at the CPI data for those dates, the March 2023 CPI was 301.836 and the September CPI was 307.789, which calculates to a 1.97% increase.

As for the next May to October 2024 period, the Treasury will use the two CPI’s from September 2023 (307.789) and March 2024 (not yet known) to calculate the next semiannual inflation rate. It and the Treasury’s fixed rate, if any, will get plugged into the formula to set the I bond’s next earnings or composite rate.

Finding Values of I Bonds

As an I bond’s value is based on interest compounded semi-annually, TreasuryDirect offers tools to check on that value over time.

The latest values of I bonds purchased in TreasuryDirect are provided in the "Current Holdings" section of the buyer’s account. Current values of paper I bonds are available using TreasuryDirect’s Savings Bond Calculator.

TreasuryDirect also offers lookup redemption tables.

Historical Rates for Series I Bonds (May 2015 – April 2024)

The following table shows a historical look at an I bond’s fixed rate along with its initial semiannual inflation rate and initial composite rate based on issue date.