Savings I Bonds May 2024: 1.30% Fixed Rate, 2.98% Inflation Rate (4.28% Total for First 6 Months)

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Update: Savings I Bonds bought from May 1, 2024 through October 31, 2024 will have a fixed rate of 1.30%, for a total composite rate of 4.28% for the first 6 months. The semi-annual inflation rate was 1.48% as predicted (2.96% annually), but the full composite rate is dependent on the fixed rate for each specific savings bond and so it is a little bit higher. This total composite rate is a bit lower than current short-term Treasury yields, and the fixed rate is about 1% lower than that of current short-term TIPS yields.

Every existing I Bond will earn this inflation rate of ~2.96% eventually for 6 months; you will need to add your own fixed rate that was set based the initial purchase month. See you again in mid-October for the next early prediction for November 2024.

Original post from 4/14/24:

Savings I Bonds are a unique, low-risk investment backed by the US Treasury that pay out a variable interest rate linked to inflation. With a holding period from 12 months to 30 years, you could own them as an alternative to bank certificates of deposit (they are liquid after 12 months) or bonds in your portfolio.

New inflation numbers were just announced at, which allows us to make an early prediction of the May 2024 savings bond rates a couple of weeks before the official announcement on the 1st. This also allows the opportunity to know exactly what a April 2024 savings bond purchase will yield over the next 12 months, instead of just 6 months. You can then compare this against a May 2024 purchase.

New inflation rate prediction. September 2023 CPI-U was 307.789. March 2024 CPI-U was 312.332, for a semi-annual inflation rate of 1.48%. Using the official composite rate formula:

Composite rate formula: [Fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)]

This results in the variable component of interest rate for the next 6 month cycle being ~2.96% to 2.97% if you use a fixed rate of between 0% and 1%.

Tips on purchase and redemption. You can’t redeem until after 12 months of ownership, and any redemptions within 5 years incur an interest penalty of the last 3 months of interest. A simple “trick” with I-Bonds is that if you buy at the end of the month, you’ll still get all the interest for the entire month – same as if you bought it in the beginning of the month. It’s best to give yourself a few business days of buffer time. If you miss the cutoff, your effective purchase date will be bumped into the next month.

Buying in April 2024. If you buy before the end of April, the fixed rate portion of I-Bonds will be 1.30%. You will be guaranteed a total interest rate of 1.30 + 3.97 = 5.27% for the next 6 months. For the 6 months after that, the total rate will be 1.30 + 2.97 = 4.27%.

Let’s look at the scenario where you hold for the minimum of one year and pay the 3-month interest penalty. If you theoretically buy on April 30th, 2024 and sell on April 1st, 2025, I estimate that you’ll earn a ~4.04% annualized return for an 11-month holding period, for which the interest is also exempt from state income taxes. If you theoretically buy on April 30th, 2024 and sell on July 1, 2025, you’ll earn a ~4.09% annualized return for an 14-month holding period.

Comparing with the best interest rates of October 2023, these rates are lower than what is available via regular nominal Treasury bonds and other deposit accounts.

Buying in May 2024. If you buy in May 2024, you will get ~2.97% plus a newly-set fixed rate for the first 6 months. The new fixed rate is officially unknown, but is loosely linked to the real yield of short-term TIPS. My rough guess is somewhere between 1% and 1.5%. The current real yield on short-term TIPS is a tiny bit lower than it was during the last reset, when the fixed rate was set at 1.3%. Every six months after your purchase, your rate will adjust to your fixed rate (set at purchase) plus a variable rate based on inflation.

If you have an existing I-Bond, the rates reset every 6 months depending on your specific purchase month. Everyone will eventually get this variable rate. Your bond rate = your specific fixed rate (based on purchase month, look it up here) + variable rate (total bond rate has a minimum floor of 0%).

Buy now or wait? Between those two options, I would buy in April as you’ll likely get a the same or tiny bit higher fixed rate and a decent initial 6-month rate. However, I actually don’t plan to buy any savings bonds right now and will be waiting until the next CPI announcement in mid-October, as I have been buying longer-term TIPS instead (in tax-deferred) to lock in the current 2%+ real yields.

Unique features. I have a separate post on reasons to own Series I Savings Bonds, including inflation protection, tax deferral, exemption from state income taxes, and potential tax benefits if used toward qualified educational expenses.

Over the years, I have accumulated a nice pile of I-Bonds and consider it part of the inflation-linked bond allocation inside my long-term investment portfolio.

Annual purchase limits. The annual purchase limit is now $10,000 in online I-bonds per Social Security Number. For a couple, that’s $20,000 per year. You can only buy online at, after making sure you’re okay with their security protocols and user-friendliness. You can also buy an additional $5,000 in paper I bonds using your tax refund with IRS Form 8888. If you have children, you may be able to buy additional savings bonds by using a minor’s Social Security Number. TheFinanceBuff has a useful post on gifting options if you are a couple and want to frontload your purchases now. TreasuryDirect also allows trust accounts to purchase savings bonds.

Concerns about TreasuryDirect customer service. Opening a TreasuryDirect account or conducting other transactions can sometimes be a hassle as they may ask for a medallion signature guarantee which requires a visit to a physical bank or credit union and snail mail. This doesn’t apply to everyone and seems to have gotten better recently, but plan to experience delays in any transaction that you try to accomplish (registration changes, converting paper bonds, changing bank accounts). They just seem to be overwhelmed in general. Also know that if your password in compromised, they will not replace any lost or stolen savings bonds.

Bottom line. Savings I bonds are a unique, low-risk investment that are linked to inflation and only available to individual investors. You can only purchase them online at, with the exception of paper bonds via tax refund. For more background, see the rest of my posts on savings bonds.

[Image: 1942 US Savings Bond poster – source]

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  1. Venkat Kompella says

    If the fixed rate is between 0% and 1%, shouldn’t the composite rate between 2.96% and 3.96% and NOT between 2.96% and 2.97%?

    • The composite rate is the sum of the fixed rate and the variable component (inflation rate). The variable component (inflation rate) will be 2.96% to 2.97% for May 2024 through October 2024. The composite rate for any specific savings bonds will depend on its fixed rate. Fixed rates have been anywhere from 0% to 3.6%.

  2. Carol Sutherland says

    Don’t understand why you are choosing to stay (your personal $ investments) with longer TIPS bond rate at 2%+(while waiting for future Oct. CPI report), instead of buying some i bonds in April 2024 at 5.27% rate for 6 month period, etc. Both are tax deferred, I believe. I am aware that i bonds have different “rules” for redeeming, etc. Thank you 🙂

    • TIPS and savings bonds definitely have their differences, and I am using them as a long-term bond. Savings bonds are nice because they offer tax-deferred characteristics outside a tax-deferred account along with better downside protection (can’t lose money when cashing in a savings bond), but in the end 2.3% above inflation is more than 1.3% above inflation.

  3. I ended up paying an extra $1000 on my taxes (at a 22% bracket vs the 12% I was aiming for) by cashing in I-Bonds that were earning 0% with all the accumulated earnings late last year. But keeping them at 0% also had an opportunity cost.

    For my non-stock retirement balance, I decided to devise the following strategy: split them into 15 parts and buy whatever is being sold at auction for 5-year TIPS three times a year. Right now, I got my first ladder at 2% and will keep doing that. Since for some reason, the returns through TIPS ETFs appear to be much lower vs buying individual TIPS and holding until maturity.

    I was contemplating though buying $20k of I-Bonds through my personal and business account to reduce about $1000 in taxable interest, which would save me about $100 in taxes (assuming I would eventually cash them at a 12% vs a 22% marginal bracket). But on $20,000, that’s only an additional 0.5% of interest which is on par or lower than 2% with 5-year TIPS on auction for my tax situation.

  4. For me, iBonds are a safety net. My wife and I have been buying them since the late 90s so we have accumulated a large position. The majority of our iBonds are past any restrictions so we don’t need an emergency fund. We have access to cash in a 24 hour window. Our fixed position is predominantly iBonds and treasuries. My wife and I will be 71 this year so it fits our needs perfectly. Yes, we will have to pay taxes as ordinary income but our iBonds have been tax deferred for over 20 years.

  5. I’ve bought these since seeing a post of yours in 2009.

    I’ve sold them all over the last 12 months.

    Either the CPI is cooked or for whatever reason it’s a poor reflection of my family’s “basket.” It’s not done well in maintaining purchasing power, which is my main goal with these.

  6. “…I have been buying longer-term TIPS instead (in tax-deferred)…”
    how to buy TIPS in a tax-deferred acct?
    I’d like to see detailed step by step tutorial on buying TIPS.
    please send link if you already.


  7. Why would people prefer I Bonds, TIPS over Treasuries, 5, 10, 20+ Treasuries?

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