Treasury: Series I bond rate is 5.51% through April 2027

The U.S. Treasury announced new interest rates for Series I bonds.

Newly purchased I bonds will pay an annual interest rate of 5.51% from Nov. 1 to April 30, an increase from the 4.26% yield if purchased by Oct. 31.

The new interest rate includes a variable portion of 4.08% based on inflation data and a fixed portion of 1.40%. Fixed interest rates rose from 0.90% announced in April, the highest level since 2006.

According to the Ministry of Finance, the compound I bond interest rate after rounding will total 5.51%.

I-bond yields hit a record high of 9.62% in May 2022 as post-pandemic inflation peaked, and investors poured millions into the government-backed, nearly risk-free asset.

As inflation cooled and I-bond interest rates fell, many short-term investors redeemed their I-bonds. But experts say investors could come back if inflation drives up I-bond rates.

“I-bonds are much more attractive at this point,” said David Enna, founder of Tipswatch.com, a website that tracks interest rates on Treasury Inflation-Protected Securities (TIPS) and I-bonds.

The Bureau of Labor Statistics announced in October that the consumer price index for September 2026 was up 3.7% year over year, up from the annual pace of 3.4% in August.

In September, inflation rose slightly due to the Iran war, increasing the cost of gasoline and energy. Economists say President Donald Trump’s tariffs, new artificial intelligence data centers and demand for travel are also spurring higher prices.

Consumers expect inflation to continue rising. A New York Fed survey released in early October showed that the one-year inflation outlook rose to 3.9% in September, the highest in more than three years.

I Bond interest rates have a floating rate component and a fixed rate component, and are adjusted by the Treasury every six months in May and November.

The variable rate is tied to inflation using the percentage change in the Consumer Price Index over a six-month period and remains the same for six months after purchase, regardless of the Treasury’s next update.

The fixed interest rate will not change even after purchasing an I bond. The Treasury Department has not disclosed how fixed interest rate adjustments are calculated, making them difficult to predict.

Ken Toomin, founder of DepositQuest.com, a blog that tracks I-bond rates, said some experts believe that I-bond fixed rates may be driven by the real, inflation-adjusted yield on five-year TIPS.

“There’s some uncertainty there,” Tumin said.

If you currently own an I bond, interest rate updates follow a six-month timeline based on the original purchase date.

I If you hold a bond for six months, the variable yield changes to the next announced interest rate. However, your fixed interest rate will remain the same for as long as you own the asset.

For example, let’s say you bought an I bond in March when the variable rate was still 3.12% and the fixed rate was 0.9%. After six months, the variable portion will move to 3.34%, announced in April 2026, while the fixed rate will remain at 0.9%.

You can earn interest on an I bond for up to 30 years, or less if you redeem the asset before that time. However, you cannot convert your I-bonds into cash until at least one year after you purchase them. If you redeem within 5 years, you will lose the last 3 months of interest.