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Key points

  • Low-risk, inflation-linked I bonds may be worth considering.
  • Interest earned in the previous six months is added to the bond’s principal.
  • The Treasury sets new I bond interest rates in May and November.

Bonds have historically been considered conservative fixed-income investments, less flashy than stocks. But Series I savings bonds have recently become more exciting and attractive. They can also help hedge against inflation.

While the I bond interest rate isn’t at its highest, it far outpaces what you’ll likely get from a savings account.

Ready to diversify your portfolio with I bonds? Read on to learn more about these low-risk investments.

U.S. Treasury announces new I bond rate

If you’re wondering what the buzz around I bonds is, the answer lies in their interest rate. The current I bond composite rate is 4.28%. This rate is nearly a percentage point lower than the previous rate.

It applies for the first six months for bonds issued from May 2024 through October 2024. For example, if you purchased I bonds on May 1, the 4.28% rate would be in effect until Oct. 31, 2024.

The fixed rate for I bonds is announced every six months: May 1 and Nov. 1. It applies to the I bonds issued for the next six months.

The inflation rate, which is related to the consumer price index, usually changes every six months too. It’s set at the same time: May 1 and Nov. 1.

I bond rate history

“Since the I bond was first introduced in 1998, the interest rate has ranged from a low of 0% to a high (of) over 13%,” said Michael Schulman, chief investment officer of Running Point Capital Advisors. “Your rate, of course, depends on when the bond was issued and the six-month period it was tracked.”

You can view I bond rates from 1998 to 2024 on the U.S. Treasury website. The highest fixed rate of 3.60% was established on May 1, 2000. The highest inflation rate of 4.81% was set on May 1, 2022.

Here’s how I bond rates have changed over the years.

DateFixed rateInflation rate
May 1, 2024
May 1, 2023
May 1, 2022
May 1, 2021
May 1, 2020
May 1, 2015
May 1, 2010

How are I bond rates set?

The U.S. Treasury sets I bond rates every May and November. Two things factor into how rates are set:

  • Fixed rate.
  • Inflation rate.

The fixed rate remains the same for the life of the I bond. It’s currently 1.30%. Whether this rate will change in November depends on whether the Treasury decides to adjust or leave it as is.

The inflation rate adjusts every six months for as long as you hold your I bond. It’s based on the consumer price index. This is a measure of changes in prices for a basket of goods and services. The inflation rate for I bonds is 1.48%. Note that during a period of deflation, the inflation rate can be negative.

I bond composite rate calculation

The fixed and inflation rates determine the composite rate, or actual rate, of return.

Here’s how a 4.28% composite rate is calculated:

[0.00130 + (2 x 0.0148) + (0.00130 x 0.0148)] = [0.0130 + 0.0296 + 0.0001924]

Adding the parts gives you 0.0427924, which is then rounded to 4.28%

If you purchase an I bond from May 1, 2024, to Oct. 31, 2024, you’ll get that annualized 4.28% return for the first six months. That’s pretty impressive.

How do you check I bond returns?

You can check returns on your bonds by logging in to your TreasuryDirect account.

The U.S. Treasury website also offers a handy growth calculator to estimate the rate of return on your bonds over time. You simply input different variables, including your initial investment amount and expected interest rate, to calculate potential returns over time. When you’re ready to cash in your I bonds electronically, you can do so through TreasuryDirect.gov.

How to sell your I bonds

You can sell I bonds through TreasuryDirect.gov. Some banks also cash in paper I bonds. But be sure to check beforehand. They may restrict how much you can cash in at one time. Remember to ask what documents you should bring.

Cashing in electronic I bonds

Through TreasuryDirect.gov, you can cash in electronic I bonds in any amount of $25 or greater to the penny. If you cash in only part of your bond’s total value, you must leave at least $25 in your account. You will receive interest only on the part you cash in.

To sell your electronic I bonds on TreasuryDirect.gov, follow these steps:

  1. Log in to your TreasuryDirect account.
  2. Navigate to ManageDirect.
  3. Follow the link for cashing securities.

Cashing in paper I bonds

Paper I bonds may be cashed at local banks or online through TreasuryDirect.gov. You must cash in the entire bond at once.

To sell paper I bonds on TreasuryDirect.gov, follow these steps:

  1. Do not sign the bonds.
  2. Download and complete FS Form 1522, which is available on TreasuryDirect.gov.
  3. Have your signature certified if you are cashing in more than $1,000 worth of bonds.
  4. Mail the form and the paper I bonds to the address listed on FS Form 1522.

Are I bonds a good investment?

“I bonds are virtually risk-free investments,” said Sankar Sharma, founder of trading education website Risk Reward Return. “Their value doesn’t go down, and they offer tax benefits. Not only can bonds be used to beat inflation, but they can also be gifted or used to pay for education or simply supplement your retirement income.”

There’s one caveat to be aware of, though. If you buy I bonds, your money will be tied up for at least a year. Need access to your money sooner? It may be wise to put your cash elsewhere.

You’ll also forfeit the last three months of interest if you cash out before holding your bonds for five years. And you’re limited each year to buying up to $10,000 in online I bonds and an additional $5,000 in paper I bonds. Paper I bonds must be purchased with your federal tax refund.

Alternatives to I bonds

I bonds aren’t the only low-risk way to diversify your investments. Here are a few other options you may want to consider.

Series EE bonds

Series EE bonds are a second type of savings bond the U.S. government offers. The 2.70% interest rate on EE bonds is lower than the 4.28% interest rate on I bonds. But EE bonds earn that interest for at least 20 years. And the government guarantees your EE bond will double in value in 20 years.

Treasury inflation-protected securities

The government sells TIPS for terms of five, 10 and 30 years. Note that the principal of a TIPS can increase or decrease over its term. But TreasuryDirect notes you’ll get the original amount back if your TIPS matures and the principal is less than the original amount.

Certificates of deposit

Most banks offer CDs. They pay a fixed annual percentage yield on money held for a certain period. The best CDs offer interest rates of 5.00% or more for one-year terms.

Frequently asked questions (FAQs)

The current composite I bond rate is 4.28%. This includes a 1.30% fixed rate and a 1.48% inflation rate. The current rate applies for six months to bonds purchased between May 1, 2024, and Oct. 31, 2024. After that, the interest rate may be adjusted.

You can purchase only $10,000 worth of electronic I bonds and $5,000 worth of paper I bonds each year. And paper I bonds can be purchased only with your tax refund. This limits how much you can diversify with government bonds.

Plus, you must hold your I bonds for 12 months before redeeming them. If you cash them in before you’ve held them for five years, you’ll lose the last three months of interest.

You should hold your I bonds for at least five years to receive all the interest you’re entitled to. Cashing them in before then will result in a loss of three months’ interest.

I bonds can be a good choice if you’re looking for a safe, long-term investment that offers protection against inflation. But they may not be appropriate for money you plan to use in the near future.

While I bonds offer a competitive interest rate, it could change in six months. You also won’t be able to cash in your I bonds for 12 months after purchase. 

Consider your risk tolerance, investment time frame and financial situation before deciding whether I bonds make sense.

I bonds have unique tax characteristics. The interest your savings bonds earn is subject to federal income tax but not state or local income tax. You can defer paying taxes on the interest until the bond matures or is redeemed. Or you can pay taxes on the interest annually.

In certain situations — such as using the money for higher education  — the interest may be tax-free at the federal level too.

Tax situations are complex. So it’s a good idea to consult a tax professional for advice tailored to your circumstances.

You can buy $10,000 worth of electronic I bonds each calendar year and an additional $5,000 worth of paper I bonds with your tax refund.

Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.

Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.

Ashlyn Brooks


Ashlyn is a personal finance writer with experience in budgeting, saving, loans, mortgages, credit cards, accounting, and financial services to name a few.

Farran Powell


Farran Powell is the lead editor of investing at ӣƵ Blueprint. She was previously the assistant managing editor of investing at U.S. News and World Report. Her work has appeared in numerous publications including TheStreet, Mansion Global, CNN, CNN Money, DNAInfo, Yahoo! Finance, MSN Money and the New York Daily News. She holds a BSc from the London School of Economics and an MA from the University of Texas at Austin. You can follow her on Twitter at @farranpowell.