The I bond's next rate hangs on one CPI number, due October 14
Two CPI-U index levels and a fixed rate Treasury picks make up every I bond rate. We rebuild the formula from the regulation and BLS tables.
- What happened
- The inflation half of the Series I savings bond rate announced for May 2026 rests on two Bureau of Labor Statistics index levels: unadjusted CPI-U of 324.800 for September 2025 and 330.213 for March 2026. The change between them is 1.67%.
- Why
- A federal regulation, 31 CFR Part 359, defines the semiannual inflation rate as the six-month change in unadjusted CPI-U and combines it with a fixed rate through a published formula. Each bond keeps its fixed rate for life; the inflation part resets every six months.
- The numbers that matter
- 1.67%Six-month CPI-U change, September 2025 to March 2026 (our calculation from BLS)330.213CPI-U index, March 2026, not seasonally adjusted$10,000Electronic I bonds one Social Security Number may buy per calendar yearOct 14BLS release date for September 2026 CPI
- Why it matters
- Anyone holding I bonds earns this inflation component plus their own bond's fixed rate, and cannot redeem in the first 12 months or without losing three months of interest before five years.
- What happens nextas we saw it on 7 Oct 2026
- BLS publishes the September 2026 CPI on October 14, 2026 at 8:30 a.m. ET; Treasury's regulation sets its rate announcements for May 1 and November 1, so the next one is dated November 1, 2026.
The six-month CPI-U change used for I bonds rose at each of the last three resets, to 1.67% for the May 2026 reset.
| Sep 2025 to Mar 2026 (May 2026 reset) | 1.7% |
|---|---|
| Mar 2025 to Sep 2025 (Nov 2025 reset) | 1.6% |
| Sep 2024 to Mar 2025 (May 2025 reset) | 1.4% |
| Mar 2024 to Sep 2024 (Nov 2024 reset) | 0.9% |
Every Series I savings bond earns a rate built from two numbers the Bureau of Labor Statistics has already printed. For the rate set in May 2026 they were 324.800 and 330.213: the unadjusted CPI-U index for September 2025 and for March 2026. The gap between them, 1.67%, is the inflation half of the rate. The other half is a fixed rate that Treasury chooses and that never changes for the life of the bond.
The method is written down in a federal regulation, 31 CFR Part 359. This piece rebuilds it from that text and the BLS tables, tests it against a rate Treasury published, and sets out what the November 1, 2026 reset depends on.
Two index levels, six months apart
The regulation names “the nonseasonally adjusted CPI-U” for the U.S. city average, all items. The rate is “(CPI-U Current − CPI-U Prior) ÷ CPI-U Prior”, rounded to the nearest one-hundredth of one percent. Its own example: the rate announced in May 2002 “reflects the percentage change between the CPI-U figures from the preceding March 2002 and September 2001.” So a May announcement uses September-to-March, and a November announcement uses March-to-September. Announcements are published “each May 1 and November 1.”
Both index levels exist before the announcement: BLS released the March 2026 index on April 10, 2026, and the September 2025 index on October 24, 2025. The seasonally adjusted figures that lead each BLS release are not the ones used.
September 2025 CPI-U: 324.800. March 2026 CPI-U: 330.213. (330.213 − 324.800) ÷ 324.800 = 5.413 ÷ 324.800 = 0.016666, which rounds to 1.67% for six months.
| Reset announced | CPI-U months | Index levels | Six-month change |
|---|---|---|---|
| November 2024 | March 2024 to September 2024 | 312.332 to 315.301 | 0.95% |
| May 2025 | September 2024 to March 2025 | 315.301 to 319.799 | 1.43% |
| November 2025 | March 2025 to September 2025 | 319.799 to 324.800 | 1.56% |
| May 2026 | September 2025 to March 2026 | 324.800 to 330.213 | 1.67% |
The six-month change has been larger at each of the last three resets than at the one before. That describes the published index only.
The formula, and why it doubles
31 CFR 359.14: “Composite rate = {(Fixed rate ÷ 2) + Semiannual inflation rate + [Semiannual inflation rate × (Fixed rate ÷ 2)]} × 2.” Multiplying out the brackets gives the form often quoted: fixed rate + (2 × semiannual inflation rate) + (fixed rate × semiannual inflation rate). The two are the same expression.
Step by step: the annual fixed rate is halved to cover six months; the six-month inflation rate is added; the small cross term pays the fixed rate on the inflation-adjusted part of the principal. Doubling the six-month sum states it as an annual figure. The bond “compounds semiannually”, so each six-month period adds half the composite rate to its value.
For bonds issued May to October 2002 the regulation uses a fixed rate of 2.00% and an inflation rate of 0.28%: [0.0100 + 0.0028 + (0.0028 × 0.0100)] × 2 = [0.0100 + 0.0028 + 0.000028] × 2 = 0.012828 × 2 = 0.025656, which rounds to 2.57%, the figure the regulation prints.
A TreasuryDirect page on a Treasury host, retrieved October 4, 2026, shows the rate for I bonds issued November 1, 2024 to April 30, 2025: 3.11%, which “includes a fixed rate of 1.20%”. That November 2024 announcement uses March 2024 (312.332) and September 2024 (315.301): 2.969 ÷ 312.332 = 0.95%. Composite = [0.0060 + 0.0095 + (0.0095 × 0.0060)] × 2 = [0.0155 + 0.000057] × 2 = 0.031114, which rounds to 3.11%. The rebuilt figure matches Treasury's to the hundredth.
In the November 2024 example the cross term is 0.000057 per six months, or 0.0114 percentage points once doubled. Almost all of the composite rate is the fixed rate plus twice the six-month inflation rate.
What a given bond earns after a reset
There is no single I bond rate. Each bond carries the fixed rate in force when it was bought; all share the same inflation component. The table applies the May 2026 component to a range of fixed rates. The 1.20% row is the fixed rate Treasury published for bonds issued November 2024 to April 2025; the other rows are illustrations.
| Fixed rate | Composite rate | Added to value over six months |
|---|---|---|
| 0.00% | 3.34% | 1.67% |
| 0.50% | 3.85% | 1.92% |
| 1.00% | 4.36% | 2.18% |
| 1.20% (bonds issued Nov 2024 to Apr 2025) | 4.56% | 2.28% |
| 2.00% | 5.37% | 2.69% |
Under 31 CFR 359.15 the latest composite rate “applies to a bond during its next semiannual rate period”, and those periods start from the issue date. The regulation's example: a bond bought in April resets every April and October, so the May rate reaches it in October. A bond bought in May resets in May and November, so “the composite rates announced in May and November will apply immediately”.
The composite rate “will always be greater than or equal to 0.00%”, and a bond's redemption value for any month “will not be less than the value for the preceding month”. A negative inflation rate still enters the formula, but can pull the composite only to zero.
Treasury's announcement page for the May 1, 2026 rates, including the fixed rate for bonds bought from May 1 to October 31, 2026, could not be retrieved for this article. The fixed rate is therefore not stated here; TreasuryDirect publishes it.
The rules around the rate
- Purchase limit. $10,000 of Series I bonds per calendar year, and a separate $10,000 of Series EE (31 CFR 363.52), per Social Security Number or Employer Identification Number, as TreasuryDirect puts it.
- Gifts. Gift bonds count toward the recipient's limit in the year they are delivered.
- Electronic only. “As of January 1, 2025, I bonds are only available electronically” (TreasuryDirect). The minimum is $25, then any amount to the penny.
- The 12-month lock. A bond issued on or after February 1, 2003 can be redeemed “at any time after 12 months from its issue date” (31 CFR 359.6).
- The three-month penalty. Before five years, the earning period is cut by three months (31 CFR 359.7). TreasuryDirect's example: cash in after 18 months and you get the first 15 months of interest.
- Life of the bond. An I bond earns interest for 30 years unless cashed earlier.
Against a Series EE bond
Series EE bonds issued on or after May 1, 2005 earn a fixed rate “established for the life of the bond”. They reach original maturity “at 20 years after the issue date”, and at that point “the redemption value of a book-entry bond shall not be less than double the purchase price” (31 CFR 351.34 and 351.35). The same three-month penalty applies before five years.
Doubling over 40 six-month periods requires 2^(1/40) − 1 = 1.748% per period, or 3.50% a year stated the way Treasury states composite rates. An EE bond held to 20 years earns at least that; an I bond's rate instead moves with CPI-U every six months, on top of its fixed rate.
What it means for your money
The inflation component is designed to match measured CPI-U inflation, so the fixed rate is the part of the return above it. A bond with a 0.00% fixed rate keeps pace with the index and no more; a bond with a 1.20% fixed rate earns 1.20% a year above it, before the cross term. That is the distinction between nominal and real returns, written into the bond.
The headline rate is an annual figure that applies for six months. At a 4.56% composite, a bond's value rises by 2.28% in that six-month period, then the rate resets. A quoted rate therefore says little about what a bond earns over several years; the sequence of six-month CPI-U changes does that.
Access is the other side of the arithmetic. Money in an I bond cannot be redeemed for 12 months, and redeeming before five years costs the last three months of interest. For a household weighing this against an emergency fund in a bank account, the lock and the penalty are fixed terms; the rate is not.
November 1, 2026: what is known and what is not
The November announcement's inflation component will be the change from March 2026 (330.213) to September 2026. BLS has scheduled the September 2026 CPI for October 14, 2026 at 8:30 a.m. ET. The fixed rate for new bonds is a separate decision: the regulation says only that the Secretary, or a designee, “determines the fixed rate of return” and gives no formula for it.
The August 2026 CPI, released September 11, 2026, put the unadjusted index at 334.980. Against March 2026: (334.980 − 330.213) ÷ 330.213 = 4.767 ÷ 330.213 = 1.44%.
The regulation uses September, not August. September's unadjusted index can come in above or below August's, and the six-month change is set only when BLS publishes it. The 1.44% is a description of five months of published data, not a forecast of the November 1, 2026 rate.
Sources
- 31 CFR Part 359 — Offering of United States Savings Bonds, Series I (eCFR)Department of the Treasury, Bureau of the Fiscal Service, via eCFR · Oct 4, 2026 · Primary source
- 31 CFR 359.14 — How are composite rates determined?Department of the Treasury, Bureau of the Fiscal Service, via eCFR · Oct 4, 2026 · Primary source
- 31 CFR 359.11 — Semiannual inflation rate (Code of Federal Regulations, July 1, 2024 edition)U.S. Government Publishing Office · Oct 4, 2026 · Primary source
- 31 CFR 363.52 — What is the principal amount of book-entry Series EE and Series I savings bonds that I may acquire in one year?Department of the Treasury, Bureau of the Fiscal Service, via eCFR · Oct 4, 2026 · Primary source
- 31 CFR Part 351 — Offering of United States Savings Bonds, Series EE (eCFR)Department of the Treasury, Bureau of the Fiscal Service, via eCFR · Oct 4, 2026 · Primary source
- 31 CFR 351.35 — Interest rates, penalties, and redemption values for Series EE bonds with issue dates of May 1, 2005, or thereafterDepartment of the Treasury, Bureau of the Fiscal Service, via eCFR · Oct 4, 2026 · Primary source
- I bonds — TreasuryDirect (page as served from a Treasury host, showing rates for bonds issued November 1, 2024 to April 30, 2025)Bureau of the Fiscal Service, TreasuryDirect · Oct 4, 2026 · Primary source
- Consumer Price Index — March 2025 (USDL-25-0459), Table 1U.S. Bureau of Labor Statistics · Oct 4, 2026 · Primary source
- Consumer Price Index — September 2025 (USDL-25-1502), Table 1U.S. Bureau of Labor Statistics · Oct 4, 2026 · Primary source
- Consumer Price Index — March 2026 (USDL-26-0599), Table 1U.S. Bureau of Labor Statistics · Oct 4, 2026 · Primary source
- Consumer Price Index — August 2026 (USDL-26-1496), Table 1U.S. Bureau of Labor Statistics · Oct 4, 2026 · Primary source
- Schedule of Releases for the Consumer Price IndexU.S. Bureau of Labor Statistics · Oct 4, 2026 · Primary source
- Consumer Price Index Archived News ReleasesU.S. Bureau of Labor Statistics · Oct 4, 2026 · Primary source
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