Key Takeaways
- I bond rates are recalculated every six months based on inflation.
- With yesterday’s release of new inflation data, we can determine the next interest rate that existing I bonds will earn.
- The new rate is roughly a percentage point lower than the previous 6-month rate.
- Some I bond holders will start earning the new rate on May 1, while for others it will begin between June 1 and Oct. 1.
- Since inflation has come down and lowered I bond rates with it, you can now earn more from a top-paying CD. Top rates range from 4.70% to 5.65% APY.
The full article continues below these offers from our partners.
The Next Rate for Existing I Bonds Is Now Known
I bonds are so named because they’re calibrated with inflation rates. When inflation rises, I bonds pay more. If you own I bonds now, there’s a good chance you bought them within the last two and a half years, when decades-high U.S. inflation rates pushed I bond returns to their highest level ever.
But inflation has cooled from a high of 9.1% in June 2022 to 3.5% in the March 2024 reading, which was released yesterday. As inflation has come down, so too have I bond rates, making them not as competitive a savings vehicle as they previously were.
And that slide continues. With yesterday’s Consumer Price Index (CPI) in hand, Investopedia can now calculate what the next 6-month interest rate will be for existing I bonds, which will be officially announced by the U.S. Treasury on May 1. Every May 1 and Nov. 1, the Treasury announces new rates that will be good for the following six months.
To understand how this works, here’s a quick primer. I bond rates are comprised of two components. The first is a fixed rate, which is assigned to every I bond based on its issue date. This rate is fixed for the life of your I bond, up to its 30-year maturity date. The other component is an inflation rate, which is adjusted every six months based on the CPI at that time. Adding the two together gives you a close approximation (within a couple of basis points) of the 6-month composite rate.
To calculate your particular I bond’s composite rate, you need to know your fixed rate, and then what the latest inflation component is. We’ve done the math for you below, for I bonds issued since November 2021. By finding your bond’s issue date in the first column, you can see in the last column what your new 6-month yield will be.
New 6-Month I Bond Rates That Will Be Announced May 1
| Your I Bond Purchase Month | Fixed Rate for the Life of Your Bond | New Inflation Calculation on May 1 | Your Next 6-Month I Bond Rate* |
|---|---|---|---|
| Nov 2023–Apr 2024 | 1.30% | 2.94% | 4.26% |
| May 2023–Oct 2023 | 0.90% | 2.94% | 3.86% |
| Nov 2022–Apr 2023 | 0.40% | 2.94% | 3.35% |
| May 2022–Oct 2022 | 0.00% | 2.94% | 2.94% |
| Nov 2021–Apr 2022 | 0.00% | 2.94% | 2.94% |
Note that while the Treasury will announce these new rates on May 1, the month the new rate will begin for you is based on the month your I bond was issued. As you can see below, only people with I bonds purchased in May or November (of any year) will earn the new rate above right away on May 1. For other issue dates, the start of the new rate will be delayed according to this schedule.
| Month Your I Bond Was Issued | Your Interest Rate Changes Every |
|---|---|
| January | July 1 and Jan. 1 |
| February | Aug. 1 and Feb. 1 |
| March | Sept. 1 and March 1 |
| April | Oct. 1 and April 1 |
| May | Nov. 1 and May 1 |
| June | Dec. 1 and June 1 |
| July | Jan. 1 and July 1 |
| August | Feb. 1 and Aug. 1 |
| September | March 1 and Sept. 1 |
| October | April 1 and Oct. 1 |
| November | May 1 and Nov. 1 |
| December | June 1 and Dec. 1 |
How Does the New Rate Compare to My Existing Rate?
Because the change in inflation rates over the last six months is less than the change over the previous six months, the calculation of the new inflation component of I bond rates has come down about a percentage point. So for anyone who bought during the popular I bond period of May and October 2022, their current rate of 3.94% will drop to about 2.97%. You can see how the new rate compares to the current rate for several issue dates below.
Want to know how today’s rate compares to further-back periods of your I bond? The table below lays out the various 6-month rates each I bond has or will earn.
| Bond Issue Date | APY for Months 1–6 | APY for Months 7–12 | APY for Months 13–18 | APY for Months 19–24 | APY for Months 25–30 | APY for Months 31–36 |
|---|---|---|---|---|---|---|
| Nov 2023–Apr 2024 | 5.27% | 4.26% (est) | Unknown | Unknown | Unknown | Unknown |
| May 2023–Oct 2023 | 4.30% | 4.86% | 3.86% (est) | Unknown | Unknown | Unknown |
| Nov 2022–Apr… |