November 2026 Brings Exciting 5.51% Rate for Series I Bonds

Inflation, which surged to levels not seen in 40 years during 2021 and 2022 due to the pandemic, had been gradually stabilizing. However, recent geopolitical tensions, particularly resulting from the conflict in Iran, have caused oil prices to rise, prompting inflation to resurface once more.

<p class="wp-block-paragraph">Consequently, the Federal Reserve is not expected to lower interest rates in the near future. In fact, it may maintain or even slightly increase them.</p>

<p class="wp-block-paragraph">While elevated rates can be burdensome for borrowers, savers are often well-positioned to benefit.</p>

<p class="wp-block-paragraph">With the latest inflation figures disclosed, we can now estimate the forthcoming interest rates for Series I savings bonds, set to reset in November.</p>

<p class="wp-block-paragraph">For those unfamiliar with Series I bonds, detailed explanations on their mechanics follow the interest rate calculation. We will first present the expected rates for November, followed by insights into how these bonds function:</p>

<details class="block-toc" open="">
    <summary>Table of Contents</summary>
    <ol>
        <li><a href="#h-november-2026-interest-rate-5-51">💸 November 2026 Interest Rate: 5.51%</a></li>
        <li><a href="#h-may-2026-interest-rate-4-26">💸 May 2026 Interest Rate: 4.26%</a></li>
        <li><a href="#h-what-are-series-i-bonds">What Are Series I Bonds?</a></li>
        <ol>
            <li><a href="#h-tax-considerations">Tax Considerations</a></li>
        </ol>
        <li><a href="#h-how-are-interest-rates-calculated">How Are Interest Rates Calculated?</a></li>
        <ol>
            <li><a href="#h-interest-compounds-semiannually">Interest Compounds Semiannually</a></li>
        </ol>
        <li><a href="#h-how-to-predict-series-i-bond-interest-rates">How To Predict Series I Bond Interest Rates</a></li>
        <li><a href="#h-when-should-you-buy-series-i-bonds">When Should You Buy Series I Bonds?</a></li>
        <li><a href="#h-when-should-you-sell-series-i-bonds">When Should You Sell Series I Bonds?</a></li>
        <ol>
            <li><a href="#h-what-about-tips">What about TIPS?</a></li>
        </ol>
    </ol>
</details>

<p class="has-tertiary-bg-background-color has-background wp-block-paragraph">🔃 <strong>Updated November 2026</strong> with the official Series I Savings bond rates effective in November 2026. The Treasury has set the fixed rate at 1.40%, allowing bonds sold from November 2026 through April 2027 to earn an impressive 5.51% for the initial six months. Note that an ID.me account is now required to access TreasuryDirect.</p>

<h2 id="h-november-2026-interest-rate-5-51" class="wp-block-heading">💸 November 2026 Interest Rate: 5.51%</h2>

<p class="has-secondary-bg-background-color has-background wp-block-paragraph">✅ Following November 1st, we confirm a fixed rate for bonds at 1.40%, representing the upper edge of our previous estimate. Consequently, the composite rate has been verified at 5.51% for the initial six months.</p>

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<p class="wp-block-paragraph">With the inflation data released by the <a href="https://www.bls.gov/cpi/" target="_blank" rel="noopener">Bureau of Labor Statistics (BLS)</a>, we can now forecast the inflation rate applicable to Series I bonds issued from November 2026 through April 2027.</p>

<p class="wp-block-paragraph">The CPI-U for March 2026 was recorded at 330.213, while the CPI-U for September 2026 stood at 336.940, resulting in a semi-annual inflation rate of 2.04%. This leads to an inflation-adjusted variable rate of 4.08%, a notable increase from the previous rate of 3.34%.</p>

<p class="wp-block-paragraph">The fixed component will not be officially announced until November 1st. However, observations from <a href="https://tipswatch.com/">Tipswatch</a> suggest that it often aligns with the 5-year TIPS. The average real yield from the 5-year TIPS over the past half-year, multiplied by 0.65, points to a fixed rate of approximately 1.30%, a significant rise from the previous rate of 0.90%, suggesting a potential possibility for 1.40%.</p>

<p class="wp-block-paragraph">Assuming a fixed rate of 1.30%, the composite rate would equate to 5.41%. Should it reach 1.40%, however, the composite rate would rise to 5.51%.</p>

<p class="wp-block-paragraph">You can also view your specific bonds' response to inflation rate changes at <a href="https://www.eyebonds.info/ibonds/index.html">EyeBonds.info</a>.</p>

<h2 id="h-may-2026-interest-rate-4-26" class="wp-block-heading">💸 May 2026 Interest Rate: 4.26%</h2>

<p class="has-secondary-bg-background-color has-background wp-block-paragraph">✅ The confirmed fixed rate for May 2026 bonds is 0.90%, leading to a composite rate of 4.26% for the first six months.</p>

<p class="wp-block-paragraph">Recent inflation data from March as per the <a href="https://www.bls.gov/cpi/" target="_blank" rel="noopener">BLS</a> enables predictions regarding the inflation rate for Series I bonds issued from May 2026 through October 2026.</p>

<p class="wp-block-paragraph">Analyzing the September 2025 CPI-U of 324.800 alongside the March 2026 CPI-U of 330.213, we derive a semi-annual inflation rate of 1.67%, translating to an inflation-adjusted variable rate of 3.34%.</p>

<p class="wp-block-paragraph">The future fixed portion remains undisclosed, yet it's likely connected to the 5-year TIPS performance. This leads to an estimated fixed rate of 0.90%, solidifying the composite at 4.26%.</p>

<p class="wp-block-paragraph">As always, you can visit <a href="https://www.eyebonds.info/ibonds/index.html">EyeBonds.info</a> for insights on how inflation rate fluctuations affect your bonds.</p>

<h2 id="h-what-are-series-i-bonds" class="wp-block-heading">What Are Series I Bonds?</h2>

<p class="wp-block-paragraph">Series I Bonds are issued by the U.S. Treasury and accrue interest for a duration of thirty years. While the interest earned is taxable at the federal level, it is exempt from state and local taxes.</p>

<p class="wp-block-paragraph">Interest rates are adjusted biannually and are partially influenced by inflation data, which is elaborated on in the following sections.</p>

<p class="wp-block-paragraph">Each individual is permitted to invest up to $10,000 in Series I bonds annually, which can be done electronically via <a href="https://www.treasurydirect.gov/" target="_blank" rel="noopener">TreasuryDirect.gov</a>.</p>

<h3 id="h-tax-considerations" class="wp-block-heading">Tax Considerations</h3>

<p class="wp-block-paragraph">A notable advantage of Series I bonds is that interest is taxable solely at the federal level, while being exempt from state and local taxation.</p>

<p class="wp-block-paragraph">While interest accrues monthly, it is compounded into the principal every six months. Though investors can choose to report interest yearly, as advised by <a href="https://www.treasurydirect.gov/savings-bonds/tax-information-ee-i-bonds/" target="_blank" rel="noopener sponsored nofollow">TreasuryDirect</a>, many prefer to report it upon cashing in the bond, at which point they receive a Form 1099-INT.</p>

<p class="wp-block-paragraph">If the interest is utilized for qualifying higher education expenses, it may also be tax-exempt.</p>

<p class="wp-block-paragraph"><strong>It’s important to note that bonds cannot be redeemed within one year of purchase, and cashing out before a five-year term results in forfeiting the last three months of interest.</strong></p>

<h2 id="h-how-are-interest-rates-calculated" class="wp-block-heading">How Are Interest Rates Calculated?</h2>

<p class="wp-block-paragraph">The interest rate for Series I bonds comprises two components: a fixed rate and an inflation-adjusted rate.</p>

<p class="wp-block-paragraph">The <strong>fixed rate</strong> remains constant throughout the bond's life and is announced biannually in May and November.</p>

<p class="wp-block-paragraph">The <strong>inflation-adjusted rate</strong> is reliant on the CPI-U, published monthly by the <a href="https://www.bls.gov/cpi/" target="_blank" rel="noopener">Bureau of Labor Statistics</a>. This metric is central to discussions on inflation, specifically referring to the Consumer Price Index for Urban Consumers (CPI-U).</p>

<p class="wp-block-paragraph">The inflation-adjusted rate is set twice annually in May and November, utilizing CPI-U figures from the preceding months. The formula employed is:</p>

<p class="has-text-align-center wp-block-paragraph">Composite interest rate = Fixed rate + (2 * Semiannual inflation rate) + (Semiannual inflation rate * Fixed rate)</p>

<p class="wp-block-paragraph">Upon purchasing a bond, the buyer benefits from the prevailing inflation-adjusted rate for six months before it readjusts.</p>

<p class="wp-block-paragraph">For instance, if a bond is acquired in April 2023, the interest rate is based on the rate established in November 2022 for the first six months, before switching to the May 2023 rate thereafter.</p>

<p class="wp-block-paragraph">It's pertinent to mention that negative inflation cannot result in negative interest rates for bonds; if inflation is negative, the rate will simply be set to zero.</p>

<h3 id="h-interest-compounds-semiannually" class="wp-block-heading">Interest Compounds Semiannually</h3>

<p class="wp-block-paragraph">Interest for Series I Bonds compounds every six months, based on the bond's issuance date.</p>

<p class="wp-block-paragraph">When a bond is purchased, the interest rate applies to the initial investment. After six months, the accrued interest is added to the principal, thus increasing the base amount for the subsequent six-month period.</p>

<h2 id="h-how-to-predict-series-i-bond-interest-rates" class="wp-block-heading">How To Predict Series I Bond Interest Rates</h2>

<p class="wp-block-paragraph">Experts utilize monthly inflation reports to project future interest rates for bonds.</p>

<p class="wp-block-paragraph">Using the above equation allows calculations based on estimated fixed rates. Thus, should you assume a fixed rate of 0%, any higher actual rate will be a pleasant surprise.</p>

<h2 id="h-when-should-you-buy-series-i-bonds" class="wp-block-heading">When Should You Buy Series I Bonds?</h2>

<p class="wp-block-paragraph">Investors can purchase Series I bonds at any time.</p>

<p class="wp-block-paragraph">It's advantageous to buy them toward the end of the month, as you will gain credit for the entire current month. This small timing strategy optimizes your advantage.</p>

<p class="wp-block-paragraph">If you lack a TreasuryDirect account, it’s wise to establish one soon, as the system is somewhat outdated and may require additional time for setup.</p>

<h2 id="h-when-should-you-sell-series-i-bonds" class="wp-block-heading">When Should You Sell Series I Bonds?</h2>

<p class="wp-block-paragraph">With the anticipated increase in fixed rates, existing bondholders may query the value of their current I Bonds. To determine the fixed rate of your bonds, simply check <a href="https://eyebonds.info/ibonds/index.html">eyebonds.info</a> or access your account in TreasuryDirect.</p>

<p class="wp-block-paragraph">The fixed rate remains constant throughout the 30-year lifespan of each bond, so your decision rests on whether you should exchange older bonds with lower rates for those offered at the new, higher rates.</p>

<p class="wp-block-paragraph">Starting November, a bond with a 0% fixed rate will yield 4.08%, while a newly acquired bond will generate 5.51% owing to its 1.40% fixed rate. This differential amplifies every six months for as long as you hold the bonds.</p>

<p class="wp-block-paragraph">If your bonds were issued during the period of 2020 to October 2022 with fixed rates of 0% or 0.40%, it may be financially prudent to redeem them and purchase new bonds. However, several important points warrant consideration:</p>

<ul class="wp-block-list">
    <li><strong>12-month Restriction:</strong> I bonds cannot be redeemed within the first year after purchase, resetting the clock should you opt to buy again.</li>
    <li><strong>3-month Penalty:</strong> Redeeming before five years incurs a forfeiture of three months' worth of interest. Bonds bought in 2021 or earlier have surpassed this window.</li>
    <li><strong>Annual Purchase Cap:</strong> The sale of $30,000 in older bonds does not permit the simultaneous purchase of $30,000 in new bonds; there's an annual purchasing limit.</li>
    <li><strong>Tax Implications:</strong> Cashing in bonds triggers federal taxes on accrued interest, though remained exempt from state and local taxes. This could significantly impact your income tax return.</li>
    <li><strong>Sell Early in the Month:</strong> As interest is credited on the first of the month, timing your redemption to occur on or just post the first day is beneficial for accruing maximum interest.</li>
</ul>

<p class="wp-block-paragraph">To maximize the benefits, aim to redeem your older bonds in early days of the month and then buy new ones toward the month’s end. Note that it's advisable to wait for the Treasury's announcement regarding the fixed rate on November 1st before taking any action; should it fall below expectations, your calculations would need adjustment.</p>

<h3 id="h-what-about-tips" class="wp-block-heading">What about TIPS?</h3>

<p class="wp-block-paragraph">The fixed rate derived from TIPS calculations highlights their appeal relative to Series I bonds. If considering reallocating funds from older I Bonds to TIPS, here are some key comparisons.</p>

<p class="wp-block-paragraph">Currently, a 5-year TIPS yields about 2% above inflation, contrasting with the predicted 1.30% fixed rate on new I bonds. While TIPS provide a higher yield, they come with specific limitations:</p>

<figure class="wp-block-table">
    <table>
        <thead>
            <tr>
                <th></th>
                <th>I Bonds</th>
                <th>TIPS</th>
            </tr>
        </thead>
        <tbody>
            <tr>
                <td><strong>Real Yield</strong></td>
                <td>~1.30% fixed rate (predicted)</td>
                <td>~2% (5-year)</td>
            </tr>
            <tr>
                <td><strong>Purchase Limit</strong></td>
                <td>$10,000 per person per year</td>
                <td>No practical limit</td>
            </tr>
            <tr>
                <td><strong>Federal Taxes</strong></td>
                <td>Deferred until you redeem</td>
                <td>Interest and inflation adjustments taxed annually</td>
            </tr>
            <tr>
                <td><strong>State & Local Taxes</strong></td>
                <td>Exempt</td>
                <td>Exempt</td>
            </tr>
            <tr>
                <td><strong>Selling Early</strong></td>
                <td>Full value plus interest after 12 months<br/>(3-month interest penalty before 5 years)</td>
                <td>Market price, subject to fluctuations</td>
            </tr>
            <tr>
                <td><strong>Term</strong></td>
                <td>Up to 30 years</td>
                <td>5, 10, or 30 years</td>
            </tr>
            <tr>
                <td><strong>Where to Buy</strong></td>
                <td>TreasuryDirect only</td>
                <td>TreasuryDirect or any brokerage</td>
            </tr>
        </tbody>
    </table>
</figure>

<p class="wp-block-paragraph">Tax treatment is a fundamental difference to note. With TIPS, the inflation adjustment to your principal incurs income tax each year, despite not receiving earnings until maturity. This "phantom income" can diminish the yield advantage in taxable accounts but can be deferred in IRAs.</p>

<p class="wp-block-paragraph"><strong>If you hold less than $10,000 in old I bonds</strong>, continuing with new I bonds tends to be the simpler choice. This allows you to maintain tax deferral while avoiding market risk. The additional yield from TIPS is about $70 annually on a $10,000 investment.</p>

<p class="wp-block-paragraph"><strong>For those with over $10,000 in old I bonds</strong>, TIPS may be a more beneficial alternative. It can be more efficient to transition fully to TIPS rather than trickle exchanging into new I bonds, allowing for a more immediate capture of competitive yields. A balanced approach involves investing $10,000 in new I bonds this year while allocating the remainder to TIPS.</p>

<p class="wp-block-paragraph">Regardless of your decision, remember that redeeming old I bonds will trigger a tax event, taxing all accrued interest within the redemption year. If substantial interest accumulates, consider spreading your redemptions across multiple tax years for optimal financial management. Consulting with a tax professional can provide tailored advice pertinent to your situation.</p>

<p class="wp-block-paragraph">Lastly, acquiring individual TIPS and holding them to maturity is preferable compared to opting for a TIPS fund. Holding TIPS to their maturity solidifies that ~2% real yield, whereas a fund faces market price risks upon sale, a factor evidenced by significant fluctuations previously observed in TIPS funds.</p>