Series I Savings Bonds remain a popular inflation hedge, but the current rate of 3.98% is down significantly from the 9.62% peak in 2022. Are they still worth buying?
Current I Bond Rate
The composite rate of 3.98% (through October 2026) combines a fixed rate of 1.3% and a semiannual inflation rate of 1.34%. The fixed rate is the highest since 2007.
Key Rules
- Purchase limit: $10,000 per person per year (electronic)
- Must hold for at least 1 year
- Selling before 5 years forfeits 3 months of interest
- Interest is exempt from state and local taxes
- Can be tax-free if used for education expenses
I Bonds vs High-Yield Savings
High-yield savings accounts currently pay 4.8% with no lock-up period, making them more attractive for short-term savings. However, I Bonds offer guaranteed inflation protection and tax advantages that make them ideal for long-term holdings.
