Today’s I-Bond rate

What the composite rate above means

The number at the top of this page is the composite rate on a US Series I savings bond — an I-Bond — bought in the current rate period. The composite is what the bond earns right now, and it is built from two very different parts. The first is a fixed rate, set on the day you buy and locked for the entire 30-year life of that particular bond. The second is an inflation rate, which the Treasury resets every six months based on changes in the Consumer Price Index. Blend the two together and you get today’s composite rate — the annualized return your money is currently earning.

The distinction matters more than it first appears. The composite rate is the headline everyone quotes, but it is temporary: the inflation half will change at the next reset, so the composite you see today is only guaranteed for six months. The fixed rate, by contrast, sticks with the bond forever. Two people can both own I-Bonds earning the same composite this month, yet one may have a far better deal for the next 30 years because they bought when the fixed rate was higher. When you read the number above, read the fixed portion beside it just as carefully — that is the part you keep.

How an I-Bond actually works

A Series I savings bond is a savings product issued directly by the US Treasury and bought at TreasuryDirect.gov. It is designed to do one job well: protect your savings from inflation. Because it is a Treasury obligation, it carries no credit risk — the return is backed by the full faith and credit of the US government — and it cannot lose value. Even in a period of falling prices, the composite rate is floored at zero, so your balance never goes down.

The two-part rate is the heart of the design. The fixed rate is announced by the Treasury and applies to every I-Bond bought during that six-month window; it never changes for as long as you hold the bond, which can be up to 30 years. The inflation rate is derived from the change in the CPI over the preceding six months and is applied on top of the fixed rate. Every six months from your purchase date, the inflation portion of your bond switches over to the newest published rate, while your fixed rate stays put. That is why the same bond can earn a high composite one year and a low one the next — only the inflation layer is moving.

The Treasury sets new rates on a fixed schedule: every May 1 and every November 1. Each announcement gives a new fixed rate for bonds bought in the coming six months and a new inflation rate that flows through to existing bonds as they hit their own reset dates. So there are really two clocks running — the Treasury’s May/November calendar, and your personal six-month cycle that starts the month you bought. Interest accrues monthly and compounds twice a year, and it is added to the bond’s value rather than paid out, so nothing lands in your bank account until you redeem.

The $10,000 limit and how to buy at TreasuryDirect

I-Bonds are bought straight from the government, with no broker and no fees, at TreasuryDirect.gov. You open a free account with your Social Security number and bank details, and you can buy in any amount from $25 up to the annual cap. That cap is $10,000 per person per calendar year in electronic I-Bonds. Because the limit is tied to your Social Security number, a married couple can buy $10,000 each, and you can open separate accounts to buy for your children or set up purchases through a trust or business.

There is one way to exceed $10,000: you can buy an additional $5,000 in paper I-Bonds each year by directing part or all of your federal tax refund to them when you file, using IRS Form 8888. Paper bonds are the only I-Bonds still issued on physical certificates. Between the electronic and paper routes, an individual can place up to $15,000 a year. The annual limit resets each January 1, which opens a well-known tactic: buy near the end of December and again in early January to lock in two calendar years’ worth of bonds within a couple of weeks — useful when the current rate is attractive and you want more exposure than a single year allows.

The liquidity rules you have to plan around

I-Bonds trade flexibility for their inflation protection, and the rules are strict enough that they shape when you should use one. For the first 12 months, an I-Bond is completely locked — you cannot redeem it at all, for any reason. That single rule is why an I-Bond is not an emergency fund: if you might need the cash within a year, it does not belong here.

After the first year you can cash out any time, but there is a catch until you reach the five-year mark. Redeem before five years and you forfeit the last three months of interest — a modest early-withdrawal penalty, similar to breaking a CD. Once you have held the bond for five years or more, that penalty disappears entirely and you keep every cent of accrued interest. The bond keeps earning until it turns 30 years old, after which it stops accruing and you should redeem it. In practice, that makes I-Bonds a good fit for money you can leave alone for at least a year, and ideally five, but not for cash you may need at a moment’s notice.

How I-Bonds are taxed

The tax treatment is one of the quietly attractive features. I-Bond interest is completely exempt from state and local income tax. If you live somewhere with a high state income tax, that exemption meaningfully lifts your effective return compared with a taxable savings account paying the same headline rate.

At the federal level, tax is deferred. You owe no federal income tax on the interest until you redeem the bond or it reaches 30 years and stops earning — whichever comes first. Until then the interest compounds inside the bond untaxed, which is a real advantage over an account where you pay tax on interest every year. When you finally redeem, the accumulated interest is reported as ordinary income for that year. You can elect to report interest annually instead, but most people prefer the deferral.

There is also a bonus for families paying for college. Under the education exclusion, if you redeem I-Bonds and use the proceeds for qualified higher-education expenses in the same year, the interest can be entirely free of federal tax — subject to income limits that phase out the benefit at higher earnings, and rules about whose education qualifies. It is worth checking the current thresholds before counting on it, but for eligible families it turns an already tax-advantaged bond into a tax-free one.

When I-Bonds are worth it — and when they aren’t

I-Bonds shine when inflation is high, because the inflation rate is the larger, faster-moving half of the composite. When the cost of living is climbing quickly, the inflation portion balloons and the composite can jump well past anything a bank will pay. The clearest example is the May 2022 rate period, when the composite hit 9.62% — its historical peak, and a rate that briefly made the humble savings bond one of the best low-risk returns available anywhere. That spike is exactly what the product is built to deliver: your savings keep pace with prices when prices are running away.

The flip side is that I-Bonds are far less compelling when inflation cools. As prices settle, the inflation rate resets lower and the composite drops with it, sometimes to levels below what a good high-yield savings account or short T-bill offers. In those stretches the deciding factor is the fixed rate. A bond bought when the fixed rate is healthy carries that edge for its full 30-year life, so it can remain a smart hold even when the composite looks unremarkable — the fixed rate is the durable value, the inflation rate is the weather. If both the composite above and the fixed rate beside it look low, and inflation is quiet, other options may simply pay more.

I-Bonds vs high-yield savings, T-bills and CDs

An I-Bond is one tool among several for low-risk savings, and the right choice depends on your time horizon and what inflation is doing. A high-yield savings account wins on pure liquidity — the money is available the same day, with no lockup — but its rate can fall at any time and the interest is fully taxable. I-Bonds give up that instant access in exchange for inflation protection and tax deferral, so they suit money you can commit for at least a year.

Treasury bills are the closest cousins: also government-backed and also state-tax-exempt, but with a fixed known yield over a short term (a few weeks to a year) rather than a floating, inflation-linked one. When inflation is falling, a T-bill’s locked rate can beat an I-Bond; when inflation is rising, the I-Bond’s adjusting rate tends to pull ahead. A certificate of deposit locks a fixed rate for a set term too, but its interest is fully taxable at every level and it has no inflation link. And because the whole point of an I-Bond is keeping pace with the cost of living, it is worth understanding what you are protecting against — our inflation calculator shows how much purchasing power prices have eaten over time.

Related tools and guides

This page is the live number and the context; the tools help you decide what to do with it. Compare your options with the where to park cash guide, check the fixed alternative on the Treasury bill rates page, model a locked term with the CD calculator, and see what inflation has done to your money with the inflation calculator. For the rest of the picture, browse the full today’s rates board. This page is general information, not financial advice.