September CPI puts the I bond inflation rate at 2.04% for November
The March-to-September CPI-U change is 2.04%, up from 1.67% in May. With a 0.90% fixed rate, the arithmetic gives a 5.00% composite from November 1, 2026.
- What happened
- The Bureau of Labor Statistics published the September 2026 Consumer Price Index on October 14, 2026. The CPI-U index, not seasonally adjusted, stood at 336.940, up from 330.213 in March 2026. That six-month change, 2.04%, is the number the Treasury uses to set the Series I savings bond inflation rate on November 1, 2026.
- Why
- The I bond inflation rate is not a judgement call. TreasuryDirect states that it is the change in the non-seasonally adjusted CPI-U over a fixed six-month window, and the May 1, 2026 announcement used the September-to-March change in exactly that way.
- The numbers that matter
- 2.04%Semiannual inflation rate implied by March–September 2026 CPI-U (calculation)5.00%Composite rate if the 0.90% fixed rate is unchanged (calculation)4.26%Composite rate for I bonds issued May–October 2026 (TreasuryDirect)336.940CPI-U NSA index level, September 2026, released October 14, 2026
- Why it matters
- A $10,000 I bond earning a 5.00% composite rate accrues $250 over six months against $213 at 4.26%, before any early-redemption penalty. Which six months you get, and when, depends on the month you bought.
- What happens nextas we saw it on 16 Oct 2026
- The Treasury's Bureau of the Fiscal Service announces the November 2026 to April 2027 rates on November 1, 2026. The fixed rate is set at the Treasury's discretion and is not known until then.
The six-month CPI-U change the Treasury uses has risen at every announcement since November 2024, and the September 2026 CPI pushes it above 2% for the first time in the span shown.
| May 2024 | 1.5% |
|---|---|
| Nov 2024 | 0.9% |
| May 2025 | 1.4% |
| Nov 2025 | 1.6% |
| May 2026 | 1.7% |
| Nov 2026 (calc.) | 2.0% |
The Series I savings bond is one of the few US government securities whose next interest rate can be worked out, to the second decimal, two and a half weeks before it is announced. The input arrived on October 14, 2026, when the CPI for September was published. One half of the rate is now arithmetic. The other half is a decision the Treasury has not yet made.
The Bureau of Labor Statistics' September 2026 Consumer Price Index release, published October 14, 2026, states that the all-items CPI-U “increased 3.7 percent over the last 12 months to an index level of 336.940 (1982-84=100)”. Table 1 of the same release gives the unadjusted September 2025 level as 324.800 and the August 2026 level as 334.980. The one-month change before seasonal adjustment was 0.6%.
The Fiscal Service's May 1, 2026 rate announcement states: “The CPI-U increased from 324.8 in September 2025 to 330.213 in March 2026, a six-month change of 1.67%.” The BLS series CUUR0000SA0, as distributed by FRED and last updated October 14, 2026, shows the same March 2026 value, 330.213.
The November arithmetic
TreasuryDirect describes the inflation component as a rate “based on changes in the non-seasonally adjusted Consumer Price Index for all Urban Consumers (CPI-U)”, set twice a year on May 1 and November 1. The May 1 announcement, quoted above, shows the window in use: September to March for the May rate. The November rate therefore uses March to September. Both index levels are now published, so the inflation component can be computed.
336.940 ÷ 330.213 = 1.02037. Subtract 1 and round to two decimal places of a percent, as the Treasury did in May: 2.04%. Check against the May figure using the same method: 330.213 ÷ 324.800 = 1.01667, or 1.67%, which matches the published May 2026 semiannual inflation rate exactly.
TreasuryDirect gives the composite formula as fixed rate + (2 × semiannual inflation rate) + (fixed rate × semiannual inflation rate). With a 0.90% fixed rate and a 2.04% semiannual inflation rate: 0.0090 + (2 × 0.0204) + (0.0090 × 0.0204) = 0.0090 + 0.0408 + 0.00018 = 0.04998, which rounds to 5.00%. If the Treasury were to set the fixed rate at 0.00%, the composite would be 4.08%; at 1.00% it would be 5.10%. The inflation component is the same in every case.
How it compares with May
| Announced | Fixed rate | Semiannual inflation rate | Composite rate |
|---|---|---|---|
| May 1, 2024 | 1.30% | 1.48% | 4.28% |
| Nov 1, 2024 | 1.20% | 0.95% | 3.11% |
| May 1, 2025 | 1.10% | 1.43% | 3.98% |
| Nov 1, 2025 | 0.90% | 1.56% | 4.03% |
| May 1, 2026 | 0.90% | 1.67% | 4.26% |
| Nov 1, 2026 | not yet set | 2.04% (calculation) | 5.00% if fixed rate stays 0.90% (calculation) |
The twelve-month CPI-U change in September 2026 was 3.7%, and the annualized inflation component of an I bond is twice the semiannual rate, or 4.08%. The two differ because the I bond window runs only from March to September, which is when the index rose fastest: 330.213 to 336.940, against 324.800 to 330.213 in the six months before. A six-month window is a noisier measure than a twelve-month one. The May 2024 rate of 1.48% was followed by 0.95% in November 2024; a high reading in one window says nothing about the next.
Who gets the new rate, and when
The November rate does not apply to everyone on November 1. TreasuryDirect's table of rate-change dates ties each bond to the month it was issued: the rate changes every six months from that month. An I bond bought in May takes a new rate on November 1 and May 1. One bought in September takes a new rate on March 1 and September 1.
| Issue month | Rate changes on | First month on the November 2026 rate |
|---|---|---|
| May or November | November 1 and May 1 | November 2026 |
| June or December | December 1 and June 1 | December 2026 |
| July or January | January 1 and July 1 | January 2027 |
| August or February | February 1 and August 1 | February 2027 |
| September or March | March 1 and September 1 | March 2027 |
| October or April | April 1 and October 1 | April 2027 |
Two things follow. A bond bought in October 2026 earns the May 2026 composite of 4.26% for its first six months, through March 2027, and only then moves to the November rate. A bond bought in November 2026 starts on the November rate immediately. TreasuryDirect states that “I bonds earn interest from the first day of the month you buy them”, so a purchase on October 30 and one on October 1 are treated identically.
TreasuryDirect: “This is called semiannually compounding (adding value 2 times a year).” The fixed rate on a bond is set at issue and, in TreasuryDirect's words, “stays the same for the life of the bond”. The inflation rate is replaced every six months. A bond issued in May 2026 keeps its 0.90% fixed rate for up to 30 years regardless of what the Treasury sets on November 1.
The lock and the penalty
TreasuryDirect's I bond page states: “You can cash in (redeem) your I bond after 12 months.” It adds that “if you cash in the bond in less than 5 years, you lose the last 3 months of interest.” Interest stops at redemption or at 30 years, whichever is first.
The penalty is the final three months, at whatever rate the bond was earning in those months. A bond redeemed in the fourth year, after six months at a 5.00% composite, forfeits three of those six months. In dollar terms on $10,000 that is $125 of the $250 the half-year would otherwise have added. A bond redeemed in its sixth year forfeits nothing.
TreasuryDirect's buying page: “up to $10,000 in Series I electronic savings bonds for yourself as owner of the bonds” per calendar year, in “any amount from $25 to $10,000 to the penny”, and “up to $5,000 in paper savings bonds with each year's tax refund”. Interest is subject to federal income tax and exempt from state and local income tax.
What it means for your money
The useful comparison is not with the May 2026 rate but with the alternatives a household has for the same cash. Interest rates on deposits and short Treasury bills are set by markets and the Federal Reserve, which raised its target range to 3.75%–4.00% on September 16, 2026. The I bond's composite is set by past inflation and a Treasury decision. The two can move in opposite directions, and have.
- On $10,000 held for the six months on the November rate, assuming a 0.90% fixed rate: 5.00% ÷ 2 × $10,000 = $250, versus $213 at the May rate of 4.26%. The difference is $37 for the half-year.
- Real terms. Twice the semiannual rate, 4.08%, is the annualized inflation the bond is compensating for. The fixed rate of 0.90% is the only part that is a return above the CPI-U measure. See nominal versus real.
- Timing. The November inflation component is known; the fixed rate is not. A bond issued in October 2026 locks in a 0.90% fixed rate and gets 4.26% for six months, then the November rate. A bond issued in November 2026 gets whatever fixed rate the Treasury announces and 5.00% from the start if that fixed rate is 0.90%. Neither choice is known to be better until November 1.
- Liquidity. Money in an I bond cannot be touched for twelve months, and costs three months of interest to touch before five years. That is a constraint on an emergency fund, not a feature of one.
The mechanics of the formula, and why the composite is not simply the sum of its parts, are set out in the site's explainer on the I bond rate formula. The September CPI release itself is covered in the preview of what was published on October 14.
Sources
- Consumer Price Index Summary — September 2026 (news release, published October 14, 2026)Bureau of Labor Statistics · Oct 16, 2026 · Primary source
- Table 1. Consumer Price Index for All Urban Consumers (CPI-U): U.S. city average, by expenditure category — September 2026Bureau of Labor Statistics · Oct 16, 2026 · Primary source
- CPI for All Urban Consumers: All Items in U.S. City Average, Not Seasonally Adjusted (CUUR0000SA0 / CPIAUCNS), updated Oct 14, 2026U.S. Bureau of Labor Statistics via FRED, Federal Reserve Bank of St. Louis · Oct 16, 2026 · Primary source
- I bonds interest ratesTreasuryDirect, Bureau of the Fiscal Service, U.S. Department of the Treasury · Oct 16, 2026 · Primary source
- Fiscal Service Announces New Savings Bonds Rates, Series I to Earn 4.26%, Series EE to Earn 2.40% (May 1, 2026)Bureau of the Fiscal Service, U.S. Department of the Treasury · Oct 16, 2026 · Primary source
- I bondsTreasuryDirect, Bureau of the Fiscal Service, U.S. Department of the Treasury · Oct 16, 2026 · Primary source
- Buy a bondTreasuryDirect, Bureau of the Fiscal Service, U.S. Department of the Treasury · Oct 16, 2026 · Primary source
- FOMC statement, September 16, 2026Federal Reserve Board · Sep 16, 2026 · Primary source
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