How to know if you should buy Series I bonds as the rate hits 5.27%

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Series I bonds are now paying 5.27% annual interest through April 2024, up from the 4.3% yearly rate offered since May — and experts have tips for short- and long-term investors.

While the new rate is down significantly from the record 9.62% offered in May 2022, investors can now lock in a fixed rate of 1.3%, up from 0.9%, for I bonds purchased from May 1 through Oct. 31.

The new fixed rate is the highest since 2007.

If you’re a long-term investor, “it’s definitely a good time to build up some I bonds,” said Ken Tumin, founder and editor of, which tracks I bonds, among other assets.

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There are two parts to I bond yields — a variable and fixed rate portion — which the U.S. Department of the Treasury adjusts every May and November.

While the variable rate changes every six months based on inflation, the Treasury may also adjust the fixed rate or keep it the same. The fixed rate stays the same after purchase and the variable rate resets every six months starting on your original purchase date. (There’s a historic breakdown of both rates here.)

“The 1.3 percent fixed rate is what you should be focused on,” said certified financial planner Jeremy Keil at Keil Financial Partners in New Berlin, Wisconsin. “It’s the best fixed rate in 15-plus years.”

Experts say the new 1.3% fixed rate makes I bonds an attractive option for long-term investors looking for an inflation-protected place for cash.

The 1.30% fixed rate is what you should be focused on. It’s the best fixed rate in 15-plus years.

Jeremy Keil

Financial advisor at Keil Financial Partners

“After five years, you can redeem [I bonds] without worrying about a penalty,” Tumin said. “At that point, it can become a very good emergency fund.”

You can buy I bonds online through TreasuryDirect. There’s a $10,000 per calendar year limit for individuals, but also a few ways to bypass it. You can, also purchase an extra $5,000 in paper I bonds with your federal tax refund.

Better options for short-term cash

While I bonds may appeal to long-term investors, experts say there are better options for short-term cash.

One of the downsides of I bonds is you can’t access the money for at least one year. You’ll also trigger a three-month interest penalty by redeeming I bonds within five years, which cuts into your overall return.

Treasury Department announces new Series I bond rate of 5.27% for the next six months

If you need the money in a year, “you’re probably better off with a top online certificate of deposit,” said Tumin. The top 1% average for one-year CDs is nearly 5.75%, as of Nov. 1, according to DepositAccounts.

Of course, you can’t directly compare I bonds to a one-year CD because I bond rates change every six months, he said. 

More flexible options may include high-yield online savings accounts, Treasury bills, or money market funds. However, those rates may eventually decline if the Federal Reserve starts cutting interest rates.

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