Current I Bond Interest Rate? May 2026 Update

The current U.S. Series I savings bond rate is 3.98% annualized for bonds issued from May 1 through October 31, 2026. It combines a 0.90% fixed rate with a 1.54% semiannual inflation rate; the rate can change for a bond after it has been held for six months.

What the current rate means

The 3.98% figure is the composite rate for newly issued I bonds during this six-month issuance period. It is an annualized rate, not a promise that every bond earns 3.98% for a full year. The rate is recalculated in six-month periods, and the timing depends on the bond’s issue month.

The fixed component is set when a bond is issued and remains attached to that bond for its life. The inflation component is reset twice a year based on changes in the Consumer Price Index for All Urban Consumers (CPI-U). Therefore, a bond bought now keeps its 0.90% fixed rate, while its inflation-linked component—and resulting composite rate—can change over time.

How I bond rates are calculated

The Treasury’s composite-rate formula combines the fixed rate and the semiannual inflation rate:

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

Using the current figures, the calculation is 0.009 + (2 × 0.0154) + (0.009 × 0.0154), or 0.03993816. Rounded to the rate announced by Treasury, that is 3.98%.

The semiannual inflation rate reflects the percentage change in CPI-U over a six-month measurement period. A positive inflation rate raises the composite rate; a negative one can lower it. The fixed rate does not change for existing bonds, although Treasury can set a different fixed rate for bonds issued in a later period.

When your bond’s rate changes

Your bond does not necessarily change rates on May 1 and November 1. The new rate applies to a particular bond when it reaches the next six-month earning period. Issue month determines when that happens. For example, a bond issued in June starts a new six-month period in December, so that is when the newly announced November rate would begin to apply to it.

Interest accrues monthly and is compounded semiannually: accumulated interest is added to the bond’s principal every six months. The Treasury’s online account displays the bond’s value, but the displayed value may reflect the early-redemption penalty if the bond is less than five years old.

Holding periods, access, and taxes

• Minimum holding period: An I bond cannot be redeemed during its first 12 months.
• Early redemption: If you redeem it before five years, you forfeit the most recent three months of interest. After five years, that penalty no longer applies.
• Maturity: I bonds earn interest for up to 30 years. They stop earning interest at that point.
• Taxes: Interest is generally subject to federal income tax but is not subject to state or local income taxes. Federal tax can usually be deferred until redemption or maturity; specific circumstances and education-related exclusions have eligibility rules, so check current Treasury and tax-agency guidance.

Unlike a market-traded bond, an I bond cannot be sold to another investor. Redemption is through the Treasury’s procedures, and the 12-month lockup means the money is not immediately accessible. These features matter when comparing the account value with cash that can be withdrawn on demand.

Comparing the rate with other savings options

A current I bond rate is not directly equivalent to a bank account’s annual percentage yield (APY) or a certificate of deposit rate. I bonds have an inflation-linked rate that can reset, a fixed component that stays with the bond, and early-redemption restrictions. Other products can have different access terms, rate guarantees, fees, and tax treatment.

Also distinguish the rate on a new bond from the rate currently accruing on an older bond. Someone who bought an I bond in a previous period may have a different fixed rate, and their inflation component changes on their own six-month schedule. The current issue rate alone does not tell you the exact return an existing bond has earned.

For a rough illustration, a $1,000 bond earning a steady 3.98% annualized rate for six months would accrue about $19.90 before considering the bond’s compounding schedule and any future rate changes. This is only an illustration: I bond rates are applied in six-month periods, and the actual value depends on issue date, rate resets, and redemption timing.

Frequently Asked Questions

What is the current I bond rate?
The rate for bonds issued May 1 through October 31, 2026, is 3.98% annualized. It consists of a 0.90% fixed rate and a 1.54% semiannual inflation rate.

Is 3.98% guaranteed for the life of the bond?
No. The fixed component is set for the life of that bond, but the inflation component resets every six months. The composite rate can rise or fall.

When does my I bond rate change?
It changes at the start of each new six-month earning period for that bond. The issue month determines the schedule, so the change date is not necessarily May or November for every holder.

Can I cash out an I bond at any time?
No. You must hold it for at least 12 months. Redeeming it before five years costs the last three months of interest; after five years, that early-redemption penalty ends.

Are I bond earnings tax-free?
They are generally subject to federal income tax, but not state or local income taxes. Federal tax is commonly deferred until redemption or maturity. Special exclusions may apply only when their requirements are met.

Where to verify the rate

Treasury rates are announced twice a year, so the quoted rate applies only to its stated issue window. Confirm the current figure and the fixed and inflation components on the U.S. Treasury’s I bond rate page before making a decision. For an existing bond, use its issue date and account record to understand which rate period currently applies.

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