Current I bond rate and history (2024)

Key points

• I bonds are low-risk, inflation-linked investments that may be worth considering.
• Interest earned in the previous six months has been 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 recently, Series I savings bonds have become a much more exciting and attractive investment option — and a valuable tool to hedge against inflation.

Though the current I bonds interest rate is not at its highest, it’s still significantly higher than the interest your money will earn in a high-yield savings account. The average savings account is around 0.46%, according to October 2023 FDIC data.

I bonds can outpace savings accounts without excessive risk. Read on to learn more about these low-risk investments.

Current I bond interest rate now

If you’re wondering what the buzz around I bonds is, the answer lies in their interest rate. The current bond composite rate is 5.27%. That rate applies for the first six months for bonds issued from November 2023 through April 2024.

For example, if you purchased I bonds on Nov. 1, 2023, the 5.27% rate would be in effect until April 30, 2024. This is nearly a full percentage point higher than the previous I bond rate.

The fixed rates for I bonds are announced every six months: May 1 and Nov. 1. And that rate 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, and it’s set at the same time: May 1 and Nov. 1.

How are I bond rates set?

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

• Fixed rate.
• Inflation rate.

As you can infer from its name, the fixed rate of a bond doesn’t change. The fixed rate for I bonds is currently 1.30%. Whether this rate will change in May depends on whether the Treasury decides to adjust or leave it as is.

The second factor is the inflation rate, which will adjust every six months for as long as you hold your I bonds. The Treasury establishes inflation rates by evaluating the CPI (a measure of the average change over time in the prices paid by urban consumers for consumer goods and services) and how the cost of goods has changed over time. The semiannual inflation rate for I bonds is currently 1.97%. During a period of deflation, the inflation rate can be negative. For instance, on May 1, 2015, the inflation rate was -0.8%.

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

Here’s how a 5.27% composite rate is calculated:

[0.00130 + (2 x 0.0197) + (0.00130 x 0.0197)] = [0.0130 + 0.0394 + 0.0002561]

Adding the parts gives you 0.0526561.

If you purchase an I bond anytime from Nov. 1, 2023, to April 30, 2024, you’ll get that annualized 5.27% 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 into 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 out 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, as they may have restrictions on how much you can cash in at one time. Remember to ask what documents you should bring with you to cash in your 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, however, you must leave at least $25 in your account. You will receive interest only on the part you cash in.

To sell 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.

When selling paper I bonds 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 to form and the paper I bonds to the address listed on FS Form 1522.

I bond rates 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.”

On the U.S. Treasury website, you can view bond rates from 1998 to 2023. During that period, the highest fixed rate on record — 3.60% — was established on May 1, 2000, and the highest inflation rate of 4.81% was set on May 1, 2022.

Here’s a look at how bond rates have changed over the years from November 2003 to November 2023.

Bond rate history

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. If you need access to your money sooner, it may be best to put your cash elsewhere.

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