Series I Bonds: How They Work and Current Rates
Series I bonds are government-issued savings bonds that earn interest through a combination of a fixed rate and a variable, inflation-adjusted rate that changes every six months. Series I bond rates are currently 3.98% through Oct. 31, 2025. The latest inflation adjustment occurred in May 2025.
How Series I bond rates work
Series I bonds have two different interest rates: a fixed rate and a variable rate, which is based on inflation. The fixed rate and inflation rate form the composite rate, which is the total amount you’ll earn on an I bond — at least until the next inflation adjustment.
The fixed rate stays the same for the life of the bond, which is 30 years or until you cash it in. The variable rate changes every six months, depending on the inflation rate, as measured by the Consumer Price Index (CPI). This means if inflation rises, so will your bond rate. The opposite is also true: If inflation decreases, your bond rate will drop.
The Treasury Department sets the inflation rate May 1 and Nov. 1 each year. However, your rate will change every six months from your specific bond’s issue date. For example, if you bought a Series I bond in January, your rate will change every July 1 and Jan. 1.
Current series I bond rates
The current Series I bond combined rate of interest is 3.98%, which includes a fixed rate of 1.10%. This rate is for bonds issued between May 1, 2025, and Oct. 31, 2025.
How do inflation changes affect I-bond holders?
When inflation changes, I bonds are directly affected — specifically, the variable rate portion of the bond will change. Here’s how:
- When inflation rises: The variable rate on your I bond will go up, increasing your earnings.
- When inflation falls: The variable rate on your I bond will decrease, reducing your earnings.
However, your I bond rate will never go below zero, which helps to keep your savings safe even in times of deflation.
How to find out the value of Series I bonds
To calculate the value of your paper savings bonds, you can use TreasuryDirect’s paper savings bond calculator. You’ll need the denomination (face value), the bond serial number and the issue date.
If you have electronic bonds, you can find their value by logging in to your online TreasuryDirect account.
Series I bond pros and cons
PROS
- Low risk: Buying I bonds is considered a safe investment, as they are backed by the full faith and credit of the U.S. government.
- Inflation protection: The variable rate adjusts with inflation, helping your money maintain its purchasing power over time.
- Tax benefit: Series I bonds are taxed on the federal level, but they’re exempt from state and local taxes.
CONS
- Minimum holding period: You’ll need to hold your I bonds for at least 12 months after buying them, and if you sell the bonds before five years, you’ll lose a few months’ worth of interest.
- Potentially low earnings: You may be able to earn more with riskier investments, such as stocks.
- Rate uncertainty: Because the variable rate adjusts with inflation every six months, you could earn less when inflation is lower.
Series I bonds vs. Series EE bonds
Series I and Series EE bonds are two types of savings bonds offered by the Treasury Department. Both bond types can earn interest for 30 years, or until you cash them in.
Series I bonds have a fixed rate and a variable rate, while Series EE has a fixed rate for 20 years — and the rate may change during the last 10 years.
Both Series I and Series EE bonds are exempt from state and local taxes, but not federal taxes. All new Series I and Series EE bonds must be purchased electronically — paper bonds are no longer sold.
Here are the current Series I and Series EE bond rates:
- Series I: 3.98%
- Series EE: 2.70%
Series I bonds vs. CDs
A certificate of deposit (CD) is a type of savings account that earns a fixed interest rate for a specified period, known as the CD term. CD terms generally range from three months to 10 years. Removing money from a CD before the end of the term can result in an early withdrawal penalty.
One of the main differences between CDs and Series I bonds is that CDs have a fixed rate that stays the same throughout the term, while Series I bonds have a fixed rate as well as a variable inflation rate. CDs can be worth considering if you want to save for shorter-term goals or if you want a stable interest rate.
How to buy Series I bonds
You can purchase Series I bonds online through TreasuryDirect. The purchase limit for Series I bonds is $10,000 per person, per calendar year. As of Jan. 1, 2025, you can buy I bonds only electronically; paper bonds are no longer available.
How to cash in a Series I bond
You can cash in Series I bonds after 12 months. One caveat: If you cash in your bonds before five years have passed, you will lose the last three months’ worth of interest. You can redeem electronic Series I or Series EE bonds online through TreasuryDirect.
Cashing in paper bonds is slightly more complicated. Here are your options:
- Visit your bank or credit union: You can try cashing paper bonds at your financial institution. Not all banks and credit unions will cash paper bonds, so it’s important to call and ask. The amount of bonds you can cash at once will vary by bank.
- Mail your bonds to the U.S. Treasury Department: Another option is to mail your bonds to the Treasury Department directly. If you choose this route, be sure to send FS Form 1522 along with your bonds. If you’re cashing more than $1,000 in bonds, you’ll need to have your signature certified, typically by a notary public.