The new rate for I Bonds bought from November through April 2024 is an attractive 5.27%, according to the U.S. Treasury's Bureau of Fiscal Service.

What's more startling: The key fixed rate – which lasts for the life of the inflation-indexed savings bonds – climbs to 1.3%. That's up significantly from a fixed rate of 0.9% for I Bonds already issued from May through October.

New rates for savings bonds are set each May 1 and Nov. 1.

The rate for Series I Savings Bonds is a blend of the fixed rate, which applies for the 30-year life of the bond, and an inflation-driven rate, which typically will fluctuate every six months based on how much inflation is soaring.

The latest annualized inflation rate is 3.94%. That rate will apply to older I Bonds, as well as new I Bonds. I Bonds adjust every six months after their issue dates to reflect inflation. The inflation-linked rate can change, and often does, every six months after your I Bonds were issued.

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Some analysts had forecast that the fixed rate for I Bonds would likely be higher in November than it was in October and earlier. Their advice, which I reported in an earlier column in October, was to wait to buy in November if you were on the fence this fall. The higher fixed rate is essential for savers who plan to hold onto the bond for many years.

Going up to the 1.3% fixed rate is considered to be a fairly dramatic jump in the history of I Bonds. One has to go back to November 2007 to find an I Bond fixed rate at 1% or higher. 

The inflation rate for I Bonds is the percent change in the Consumer Price Index for Urban Consumers over a six-month period ending before May 1 and Nov. 1.

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The fixed rates on I Bonds can vary significantly over time, depending on when the bonds were issued.

I Bonds issued in 2021 and 2022, for example, have a 0% fixed rate. I Bonds with a 0% fixed rate would see an estimated 3.94% rate for six months, reflecting recent inflation.

The highest fixed rate on I Bonds was 3.6% for bonds issued from May through October 2000 — making those the last bonds you'd want to cash in. An inflation adjustment of 3.94% means those bonds would be paying 7.61% over a six-month stretch, according to Ken Tumin, who founded DepositAccounts in 2009, which is now part of LendingTree.

Savers who buy I Bonds cannot redeem, or cash in, those bonds for the first 12 months after purchase. I Bonds held less than five years are subject to a three-month interest penalty. I Bonds are bought at TreasuryDirect.gov.

A key point at tax time: Savers are allowed to buy up to $5,000 of I Bonds directly if they're receiving a tax refund when they file their 2023 tax returns next year. You file Form 8888 with your tax return and complete Part 2 to request that your tax refund be used to buy paper bonds.

Contact personal finance columnist Susan Tompor: stompor@freepress.com. Follow her on Twitter @tompor.

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