The U.S. Treasury Department's Bureau of the Fiscal Service will announce the new Series I Savings Bond rate on Thursday, April 30, with the new rate effective Friday, May 1 for all purchases through October 31. Industry forecasters at TipsWatch, Treasury Direct, and Vanguard's fixed income research desk all project a composite rate of approximately 4.26 percent, up from the current 4.03 percent that has been in place since November 1, 2025. The composite rate is built from two parts: a fixed rate that stays with the bond for its 30-year life, and an inflation rate that resets every six months based on non-seasonally adjusted CPI changes.
The fixed rate is the more important number for long-term holders because it locks in for the entire bond. The current fixed rate is 0.90 percent and most analysts project it will hold at that level for the May 1 reset. The Treasury sets the fixed rate based on a formula tied to real yields on Treasury Inflation-Protected Securities (TIPS) and to the spread between TIPS and conventional Treasury yields. With 5-year TIPS yields hovering around 1.85 percent and 10-year TIPS at 2.05 percent through April, the formula points to a fixed rate in the 0.85 to 1.05 percent range. The 0.90 percent estimate sits in the middle of that band.
The inflation rate adjustment is the moving piece. The new inflation portion is expected to be 3.34 percent annualized, reflecting a 1.67 percent six-month CPI change between September 2025 and March 2026. That is up from the 3.12 percent inflation rate that has been in effect since November. The composite formula combines the fixed and inflation rates with a small adjustment factor, producing the 4.26 percent projected composite for the next six months. The actual computed rate will be officially posted at TreasuryDirect on the morning of April 30 or May 1.
For buyers, the timing question matters. Anyone who purchases an I Bond before April 30 locks in the current 4.03 percent rate for the first six months and then receives the new May reset for the second six months. Anyone who purchases on May 1 or after receives the new 4.26 percent rate for the first six months and then receives the November 2026 reset for the second six months. For most buyers, waiting until May 1 produces a slightly higher first-year yield, on the order of 0.20 percentage points or about $2 per $1,000 invested. The math is small but real.
The annual purchase limit remains $10,000 per individual through TreasuryDirect, plus an additional $5,000 in paper bonds purchased through a federal tax refund using IRS Form 8888. Married couples can combine for $20,000 per year through individual electronic accounts plus $5,000 in paper. Trusts and certain businesses can also purchase, with separate $10,000 annual caps. The 30-year final maturity, the 1-year minimum holding period, and the 3-month interest penalty for redemptions before five years all remain unchanged.
The tax treatment continues to favor I Bonds over comparable taxable savings vehicles for most retail buyers. Interest is exempt from state and local income taxes. Federal tax can be deferred until redemption or final maturity, which gives the bonds a tax-deferred compounding benefit similar to a non-deductible IRA. The education exclusion under Internal Revenue Code Section 135 allows tax-free redemption when bond proceeds pay qualified higher education expenses, subject to income phase-outs that for 2026 begin at $99,500 modified adjusted gross income for single filers and $159,200 for joint filers.
I Bonds compare favorably against high-yield savings accounts and short-duration Treasury funds for the right buyer. Top high-yield savings rates have compressed to the 3.85 to 4.10 percent range as the federal funds rate stays paused. The Floating Rate Treasury ETF (USFR) and the iShares 0-3 Month Treasury ETF (SGOV) both yield in the 4.20 to 4.30 percent range. The 4.26 percent I Bond composite gives roughly equivalent yield without the daily price movement of an ETF, but with the trade-off of the one-year minimum hold and the three-month interest penalty before five years. For an emergency fund's deeper layer rather than its first dollars, I Bonds work. For a working emergency fund that needs same-day access, a high-yield savings account still wins.
The structural case for I Bonds remains the same one that drove the 2022 buying surge. The bonds are the only government-backed instrument that pays both a real yield and an inflation pass-through, which makes them a near-perfect inflation hedge for retail money outside a tax-deferred retirement account. With a 0.90 percent fixed rate and projected 3.34 percent inflation portion, the May 2026 vintage will compound at a real return that has not been available on retail government bonds for most of the last two decades. The window for purchase at this rate runs from May 1 through October 31, with another reset coming November 1.