I Bond Rates May 2026: 4.26% – Should You Buy or Wait?

The current Series I bond interest rate is 4.26% for bonds issued from May 1 through October 31, 2026.

That rate includes:

• 0.90% fixed rate (stays the same for up to 30 years)
• 3.34% inflation rate (resets every 6 months)

That sounds solid. And in some cases, it is.

But here’s the mistake I see people make every time I bond rates update:

They focus on the 4.26%… instead of how that was calculated, and what it means after the initial six-month interest rate period.

Read on to decide if you’d like to continue buying I Bonds, or if you’d rather cash them out.

Also consider if and when you may want to swap out your existing I Bonds for new I Bonds at a higher fixed rate.

Quick I Bond Summary for Reporters

• Current I Bond Rate: 4.26%
• Effective Dates: May 1 – October 31, 2026
• Last Day to buy I Bonds at current rates: October 29, 2026
  • Purchases made today are effective the next business day, and October 31 is a Saturday
• Fixed rate: 0.90% (locked for up to 30 years)
• Inflation rate: 3.34% (annualized)
• Previous rate: 4.03%

Jeremy Keil’s, also known as “Mr. Retirement” on YouTube says:
“I Bonds are no longer a ‘no-brainer’ like they were in 2022, but they are still a simple way to help part of your savings to beat inflation.”

What is the current I bond rate? (May 2026 – October 2026)

The May 2026 I bond composite rate is 4.26%  (US Treasury).

The May 2026 I Bond Fixed Rate is 0.90%.

The May 2026 I Bond inflation rate is 3.34%.

Effective dates: May 1 – October 31, 2026

What Actually Matters with I Bonds Right Now

The headline number—4.26%—is fine, but the more important number is the 0.90% fixed rate.

Why?

Because the fixed rate stays with the bond for as long as you hold it, up to 30 years, which means:

• You’re locking in a return that’s guaranteed to be above inflation for up to 30 years.

The inflation portion will change every six months. It can go up. It can go down. If inflation drops, your return drops with it.

But that fixed rate? That’s your “real return” above inflation—potentially for the next 30 years.

And right now, 0.90% is relatively high compared to most of the past decade.

Should I buy I Bonds in 2026?

If you’re buying I Bonds now it’s likely because of your desire to get the 0.90% fixed rate, which is a relatively high fixed rate over the past 20 years.

I would ask myself two questions:

• Am I willing to hold the bonds for 12-months minimum, perhaps even five years or more?
• How do I bond interest rates compare to the alternatives?

How does the current I Bond rate compare to historical rates?

When we compare the 6-month I Bond rates against 12-month Treasuries at the time we see that the 6-month I bond rate is an average of 1% lower.

At an initial rate of 4.26%, buying an I bond today gets roughly 0.5% more compared to the 3.75% 12-month Treasury Bill rate (April 30, 2026).

You could say that buying an I Bond right now is a ‘good deal’ historically.

One big difference between a Treasury Bill and the I Bond is that you can get out of Treasury Bills before 12 months AND you don’t have to give up the prior 3 months’ interest if you cash out in the first 5 years. You could be subject to changes in the price of the Treasury Bill if you don’t hold it to maturity, however.

Another difference is that when you buy the I Bond you’re locking in that 0.9% fixed rate ABOVE inflation for up to 30 years.

What Are The Advantages of I Bonds?

I Bonds have three main advantages:

1. Protect Purchasing Power

I bond interest rates are guaranteed to match inflation for up to 30 years

• Avoid Negative Returns

I bonds are guaranteed by the US Government to never go below 0% interest

• Tax Deferral

I bond interest is tax-deferred. You won’t pay taxes on the interest you earn until you cash them in. and there are some ways to use the I bonds for higher education tax-free.

What are the disadvantages of I Bonds?

I Bonds are not liquid, especially for the first 12 months

You cannot, at all, access your money for the first 12 months, even with a penalty.

For the first five years, if you cash them in, you’ll pay a 3-month interest penalty.

• The return isn’t predictable

When you buy an I bond you only know what interest rate you’ll get for the next 6 months.

• There’s a purchase limit

You can only buy $10,000 per person (or entity) per year.

How Are I Bond Interest Rates Calculated?

The 4.26% rate you see now doesn’t stay there forever.

This fixed rate stays with those I Bonds throughout the 30 years that they earn interest.

The current semiannual inflation rate of 3.34% will reset every 6 months following the purchase, or renewal, of your I bond.

The composite rate is the combination of your fixed rate and the new inflation rate, however, even if inflation goes negative, your composite rate can never go below 0.

How was the new I Bond inflation rate determined?

With I Bonds, it’s good to keep an eye on the latest CPI-U numbers, which you will see below determine the inflation rates for I bonds. The latest CPI numbers were released on April 10, 2026.

CPI-U Data used to create I Bond Inflation Rate

September 2025 CPI-U: 324.800
March 2026 CPI-U: 330.213
I Bond Inflation Rate Formula = (330.213 / 324.800) = 1.67% semi-annual rate = 3.34% annualized

May 2026 – October 2026 Inflation Rate: 3.34%

How do I Bonds Actually Work

An I bond is a U.S. Government Savings bond that carries a fixed interest rate, plus an additional inflation adjuster, so that you get an inflation-adjusted real rate of return.

What are the details with an I Bond?

• I bonds are often used as part of your emergency fund money
• You have to hold them for 12 months minimum. You can’t cash out before then.
• If you cash out between the end of year one and the end of year five, you lose your prior three months interest as a penalty.
• You can only buy $10,000 per person, per year, and you have to do it at TreasuryDirect.gov
• I bonds stop earning interest after 30 years.

What if you’re considering cashing out your I bonds?

If you’re considering cashing out your I Bonds make sure you find the best time that gets you the most interest at my blog on When to Cash Out Your I Bonds.

Bonus: Listen to our podcast with savings bond expert David Enna from TipsWatch.com on I bonds: US Series I Savings Bonds Simplified

Why are I Bonds so interesting right now?

I Bonds were somewhat unknown until they started offering eye-popping yields, based on the inflation rate, in May 2021 with the 3.54% rate.

Then, in November 2021 I bond rates doubled to 7.12% and then 9.62% in May 2022! The last super-high inflation rate was 6.48% in November 2022, which also came with a 0.4% fixed rate.

Right now, the fixed rate of 0.9% is the most compelling reason to buy I Bonds. This fixed rate got to 1.30% in November 2023 and has stayed somewhat close to this high ever since. These fixed rates haven’t been this high since October 2007.

I Bonds got famous for the high inflation rates in 2021 & 2022 – they may stay popular for new purchases based on the high fixed rates.

What’s the worst-case scenario when I buy an I Bond?

The worst-case scenario for purchases in May 2026 is you earn 4.26% interest for the 6 months after you buy your I bond, followed by 0%, if inflation turns negative.

You know then that you will get at least 2.13% over the next year, although likely higher than that. Inflation has only been negative 2 times out of the 57 semi-annual inflation rates – in May 2015 and May 2009.

This compares to close to 4% on 12 month Treasury Bills and CDs; however, 12 months from now you don’t know what those Treasury Bills and CDs would be renewing at.

You would know, with your I Bond, that if you purchase today you will get at least 0.9% above inflation. That fixed rate, giving you a return above inflation, is the big value in I Bonds right now.

While your current 12-month guaranteed rate doesn’t compare to other 12-month investments, you are guaranteed, that every 6 months your renewal rates will be 0.9% above inflation for the 30 year life of your I Bond.

What are the interest rates on investments that are similar to I Bonds?

12-month CD for a top rate of 4.10%, and average rate of 1.53%

Money Market for a top rate of 3.90%, and average rate of 0.57%

Savings account for a top rate of 4.21%, and average rate of 0.38%

12-month Treasury Bill Rate of 3.75%

(based on Bankrate.com and Federal Reserve Data from April 30, 2026)

Unlike most of 2021 and 2022, I Bond rates are now more in line with historical rates, but are also a relatively good deal compared to 12-month Treasury Bills since I bond rates are currently 0.5% higher, and historically I bond rates have been 1% below Treasury Bill rates.

Are I bond rates expected to go up or down?

I bond rates depend on inflation. If inflation falls, future rates will likely be lower. If inflation rises, rates will increase. The fixed rate (currently 0.90%) stays the same for the life of the bond.

How to Get Strategic with Your I Bonds Purchase

There are no partial months in I Bond world! When you are buying I Bonds it serves you best to buy towards the end of the month, and to sell towards the beginning of the month.

David Enna, author of Tipswatch.com suggests being even more strategic, “You can buy an I Bond near the last day of the month and get credit for a full month’s interest, so you can effectively cut the one-year holding period to 11 months and a day, but realistically, you may want to extend the holding period to 14-15 months.

If you lose the prior three months of interest by cashing in early and are unhappy with the new 6-month rate, you would want to hold on for the full higher interest period in months six to twelve and wait for another full three months of lower interest before cashing in after month fifteen.”

How to Take Action On Your Interest Rate Money

When saving your money over a 12-month time frame I Bonds are just one of many investments to consider. Zvi Bodie likes to call I bonds “America’s Best Kept Investing Secret.”

Consider your I bonds purchase not just for the short run, but also over the long run as part of a healthy emergency fund savings balance. To buy your I Bonds, go to TreasuryDirect.gov.

Bonus: Listen to the podcast with David Enna from TipsWatch.com for more in depth analysis on I bonds: US Series I Savings Bonds Simplified

Bonus: For guidance on buying Treasury Bonds and Treasury Bills check out our blog: Get More Interest From Buying Treasury Bonds and Bills (T-Bills) Through Treasury Direct.

More I Bonds Resources

• 9 Steps on how buy I Bonds by Jeremy Keil
• A Complete Guide to Investing in TIPS and I Bonds (2022) by David Stein with Money For the Rest of Us
• Podcast: US Series I Savings Bonds Simplified featuring David Enna from TipsWatch.com
• Treasury Direct: Series I Savings Bonds
• 3 Things You Should Know Before Choosing A Financial Advisor
• 7 Questions That Could Make or Break Your Retirement
• Free Retirement Video Course: Your 5 Step Retirement Income Plan

Connect With Jeremy Keil:

• Mr. Retirement YouTube Channel
• LinkedIn: Jeremy Keil
• Facebook: Jeremy Keil
• LinkedIn: Keil Financial Partners

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