Are I bonds better than a high-yield savings account?

It depends on the spread. When the I bond composite rate exceeds top HYSA rates by 50+ bps, I bonds usually win for money you can lock up at least a year. When HYSAs are higher, the savings account is simpler, and you keep liquidity.

Can I buy more than $10,000 a year?

Each Social Security number gets the $10,000 electronic limit, plus the $5,000 paper-via-refund route. A trust or a child can have its own TreasuryDirect account with separate limits, couples often use these to multiply household capacity.

What happens if I sell before 5 years?

You forfeit the last 3 months of interest. Even with the penalty, returns usually still beat a savings account if you held at least 18 months at a reasonable composite rate.

Rules · Saving · 2026

I Bond Rates for 2026

By Yinka Olayokun Published May 12, 2026 Verified May 10, 2026

2026 at a glance

The current Series I savings bond composite rate (May 2026 issue) is roughly 3.10%, made up of a 1.20% fixed rate and a 1.90% annualized inflation component. Rates reset every six months (May 1 and November 1). Each individual can buy up to $10,000 of electronic I bonds per calendar year through TreasuryDirect, plus up to $5,000 in paper I bonds via a federal tax refund.

2026 I bond rate snapshot (May 2026 issue)

Component	Rate
Composite rate (annualized)	~3.10%
Fixed rate (locked for the bond's 30-year life)	1.20%
Inflation rate (annualized, resets every 6 months)	1.90%
Annual purchase limit (electronic, per person)	$10,000
Additional via tax refund (paper)	$5,000

How the composite rate is built

The composite rate combines a fixed rate (set when you buy and locked for the bond's full 30-year life) with a semi-annual inflation rate based on CPI-U. Treasury announces the new fixed and inflation components on May 1 and November 1.

The fixed portion is what makes a current vintage attractive for long holds, bonds bought when the fixed rate is high keep that rate forever, regardless of where inflation moves later.

Holding rules and tax treatment

I bonds must be held at least 12 months. Redeeming between 1 and 5 years forfeits the most recent 3 months of interest. After 5 years, no penalty. Interest is exempt from state and local tax, and federal tax can be deferred until redemption (or used tax-free for qualified higher-education expenses, subject to income limits).

Frequently Asked Questions

Are I bonds better than a high-yield savings account?: It depends on the spread. When the I bond composite rate exceeds top HYSA rates by 50+ bps, I bonds usually win for money you can lock up at least a year. When HYSAs are higher, the savings account is simpler, and you keep liquidity.
Can I buy more than $10,000 a year?: Each Social Security number gets the $10,000 electronic limit, plus the $5,000 paper-via-refund route. A trust or a child can have its own TreasuryDirect account with separate limits, couples often use these to multiply household capacity.
What happens if I sell before 5 years?: You forfeit the last 3 months of interest. Even with the penalty, returns usually still beat a savings account if you held at least 18 months at a reasonable composite rate.

Primary sources

TreasuryDirect, I Bond rate announcements , U.S. Department of the Treasury. Verified May 10, 2026.
TreasuryDirect, I Bond purchase limits , U.S. Department of the Treasury. Verified May 10, 2026.

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