I Bond Rates in 2026: 4.26% Now, How It Is Set and the Lockup

I bonds pay 4.26% on bonds bought from May 1 through October 31, 2026. That composite rate is built from a 0.90% fixed rate and a 1.67% inflation rate, and it applies for the first six months. The next rates are set on November 1, 2026. You can buy in TreasuryDirect from $25, up to $10,000 per calendar year per Social Security number, and you cannot cash out before 12 months.

FinanceRadar data: only 2 of the 48 high-yield savings APYs we verify are higher than the I bond: GO2bank at 4.50% (on a capped balance) and Elevault at 4.34%, as of October 10, 2026. The catalog average is 3.25% across all the accounts we verify (high-yield savings statistics). The I bond beats that average, but the two leaders beat the I bond, and the I bond locks your cash for at least a year.

The rate in one table

How the rate is built

An I bond rate has two parts. The fixed rate is set when you buy and never changes for that bond. The inflation rate follows the non-seasonally adjusted CPI-U, and the Treasury resets it every May 1 and November 1. The two combine in one formula: the fixed rate, plus two times the semiannual inflation rate, plus the fixed rate times that inflation rate.

With today's figures, that is 0.0090 + 0.0334 + 0.00015, or 0.0425503. Rounded, it is the headline rate in the table. Most of the total comes from inflation, which contributes 3.34 percentage points. The fixed rate adds 0.90 points, and the cross term adds only 0.015 points.

The formula moves with inflation. Bonds bought from November 2025 through April 2026 started at 4.03%, using the 1.56% inflation rate set on November 1, 2025. Each one then changes on its own six-month date, so a November 2025 bond moved to the current rate on May 1, 2026.

Older purchases sit at different rates, too. In the current six-month period, a bond bought between May and October 2025 earns 4.46%, and one bought between May and October 2024 earns 4.66%. The rate on your bond depends on when you bought it, not only on the headline figure.

When your rate changes

The fixed rate lasts for the life of the bond. The composite changes every six months, on dates keyed to your issue month rather than to the Treasury's May and November announcements. The TreasuryDirect rate schedule works like this:

Deflation can pull the combined rate below the fixed rate. It cannot pull it below zero, because TreasuryDirect stops the combined rate at zero. The zero floor limits how far deflation can cut the rate, and the fixed rate is the one part that never changes.

Interest starts on the first day of the month you buy. Every six months the bond adds the interest it earned to its value, then earns the next rate on that larger value. You receive all the interest when you cash out, or automatically when an electronic bond reaches 30 years.

On $10,000 at the current rate, that is $426 a year before compounding, with the rate held flat. Semiannual compounding adds a little more, and each six-month change moves the total in one direction or the other.

The lockup: 12 months, then a penalty before 5 years

You cannot cash an I bond before 12 months. From 12 months up to 5 years, cashing out costs the last three months of interest. TreasuryDirect's example: a bond cashed at 18 months pays the first 15 months of interest. At 12 months, you get nine months of interest, and on that balance the three forfeited months are worth about $107 at the current rate, on a simple basis.

After 5 years, no interest is forfeited. The value TreasuryDirect shows for a bond under five years old leaves out those last three months, so the on-screen value already reflects that forfeit.

Buying limit and how to buy

I bonds are electronic only, and they have been since January 1, 2025. You buy and hold them in a TreasuryDirect account. The minimum is $25, and any amount above that is allowed to the cent, such as $36.73.

The purchase limit applies per calendar year for each Social Security number, counted against the first-named owner. A bond you co-own counts only toward the first-named owner's limit. A gift counts toward the recipient's limit, and each child has a separate limit. There is no cap on the total amount one person can own.

Interest is taxed by the federal government but not by state or local governments. You choose whether to report the interest each year or when you cash the bond.

I bond or high-yield savings

On the same balance, the gap between the I bond and the average savings account is 1.01 points, or $101 a year, if both rates hold. Neither rate is fixed. The I bond's composite can change every six months, and a savings APY can change after you open the account. The real trade is the lockup against the spread.

For cash you will not touch for at least a year, the I bond beats an average savings account. For cash you might need inside a year, it is the wrong place, whatever the rate. The where to put cash guide sets Treasury bills next to savings. The money market comparison covers the checks and card trade-off, and the money market statistics show our catalog numbers for that side. The rate tracker shows how fast savings rates move, and the best high-yield savings guide ranks the accounts we verify.

When an I bond is the wrong pick

• You may need the cash inside 12 months. No early exit is allowed, and the rate is no help if the money is gone.
• You expect to cash out before 5 years. Each early cash-out gives up three months of interest, about $107 on that balance at the current rate.
• You need a rate that stays put. The composite can drop at each six-month change, and deflation can push it down toward zero.
• You want to buy more I bonds in a year than the annual limit allows. The purchase limit applies per calendar year for each Social Security number.

Most of today's rate comes from inflation. If inflation falls, the I bond rate falls with it, while the fixed part stays the same for the bond's life. Series EE bonds pay a fixed rate instead, and the EE savings bond calculator shows what one is worth at 10, 20 and 30 years.

What we checked

We read TreasuryDirect's I bonds interest rates, I bonds and How much can I spend or own pages on October 10, 2026. We read the FinanceRadar high-yield savings statistics the same day. Dollar figures are the balance times the stated rate, with the rate held and nothing added or withdrawn. We did not buy or cash in a bond for this page.

This page is general information, not personalized financial advice. Confirm the current rate and terms on TreasuryDirect before you buy, because new rates are set on November 1, 2026. Financeradar may earn a commission from some links (how we make money).

Cite this: FinanceRadar, "I Bond Rates in 2026: 4.26% Now, How It Is Set and the Lockup", October 2026.

FAQ

What is the I bond rate right now?

For bonds bought from May 1 through October 31, 2026, TreasuryDirect shows a composite rate of 4.26%. It is made of a 0.90% fixed rate and a 1.67% inflation rate for six months. The next rates are set on November 1, 2026. These figures were read on October 10, 2026, so check TreasuryDirect before you buy.

How is the I bond rate calculated?

The composite is the fixed rate, plus two times the semiannual inflation rate, plus the fixed rate times that inflation rate. Plug in the fixed and inflation figures from the table above, and the formula returns 0.0425503 before rounding. The fixed rate stays for the bond's life, the inflation part is based on CPI-U and resets every six months, and the combined rate cannot go below zero.

When does an I bond's rate change?

The Treasury sets new fixed and inflation rates every May 1 and November 1. Your own bond's composite changes every six months from its issue month. A bond bought in October changes on April 1 and October 1, and a bond bought in May changes on November 1 and May 1.

Can I cash out an I bond after one year?

Yes, once 12 months have passed. If you cash out before 5 years, you lose the last three months of interest. TreasuryDirect's example: a bond cashed at 18 months pays the first 15 months of interest. At 12 months, that means nine months of interest.

How much can I buy in I bonds each year?

Up to $10,000 per calendar year for each Social Security number, in electronic I bonds only. The minimum purchase is $25. Gifts count toward the recipient's limit, and a co-owned bond counts only toward the first-named owner.

Are I bonds better than high-yield savings?

On rate, the I bond's headline beat the 3.25% catalog average for high-yield savings on October 10, 2026. But two of the 48 published APYs we verify are higher, and the I bond has a 12-month lockup. The best high-yield savings guide lists the accounts behind that average. The better choice depends on when you need the cash, so use the I bond only for money you will not touch for at least a year.

Are I bond earnings taxed?

Yes, by the federal government, and no, by state and local governments, according to TreasuryDirect. You choose whether to report the interest each year or when you cash the bond.