--- title: The New I Bonds Rate Is 5.27% — Is It a Good Time to Buy? description: The Department of the Treasury announced that the new rate for I bonds issued between November 2023 and April 2024 is 5.27%. authors: - name: Adam Hardy role: Lead Data Reporter url: https://money.com/author/adam-hardy/ bio: Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers. education: University of South Florida, BA, Magazine Journalism at_money_since: 2021 articles: 498 covers: - Investing - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - The Penny Hoarder - Forbes Advisor - Creative Loafing - The New York Times - The Washington Post - Bloomberg - Harvard Law School - The Federal Register - National Consumer Law Center - CBS News - Becker's Hospital Review - Business Insider - Mother Jones - The Week - Fortune - The Philadelphia Inquirer - National Association of Student Financial Aid Administrators (NAFSAA) - Education Advisory Board (EAB) - The Institute for College Access & Success (TICAS) - This Morning with Gordon Deal - Empower - Reddit social: - https://www.x.com/hardyjournalism - https://www.linkedin.com/in/hardyjournalism/ editors: - name: Julia Glum role: Managing Editor url: https://money.com/author/julia-glum/ bio: Julia Glum joined Money in 2018 and specializes in covering financial trends that affect everyday Americans' wallets. She also writes Dollar Scholar, a weekly newsletter that teaches young adults how to navigate the messy world of money. education: University of Florida at_money_since: 2018 articles: 453 covers: - Investing - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - Newsweek - International Business Times - CBS News - Good Morning America - WUSA9 - Pix 11 - The New York Times - Mashable - The Washington Post - CNBC - Politico social: - https://x.com/superjulia - https://www.linkedin.com/in/julia-glum published: '2023-10-31T16:10:27.000Z' modified: '2024-01-10T15:15:11.000Z' section: Investing tags: - News word_count: 999 canonical: https://money.com/new-i-bonds-rate-november-2023/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Close-up of a hand holding a U.S. Savings Bonds, coming out of a calendar](https://img.money.com/2023/10/News-Should-You-Buy-Bonds2.jpg) Series I savings bonds issued by the federal government appear to be coming back in vogue. The interest rates for I bonds, as they’re commonly called, are on the rise again. The Department of the Treasury announced Tuesday that the new rate for I bonds issued between November 2023 and April 2024 is 5.27%. The previous annualized rate for bonds purchased over the last six months was 4.30%. Because they're designed to insulate savers from inflation, I bond rates are recalculated every six months based on recent trends. Stubbornly high prices have contributed to the attractive rates of the [government savings bond](https://money.com/best-savings-bonds/) over the past few years. While the current yield is far from the all-time high of 9.62% notched in May 2022 — when inflation was through the roof — 5.27% is still historically quite high. Investors who are looking for a safe, long-term hedge against rising prices may have a particularly good reason to buy I bonds during this six-month cycle. "We’ve had a long wait for a super-safe return this attractive," Dave Enna, I bonds expert and founder of financial blog TIPSWatch, [wrote Tuesday](https://tipswatch.com/2023/10/31/i-bonds-fixed-rate-rises-to-1-3-highest-in-more-than-16-years/) in reaction to the new rates. Before deciding to [purchase I bonds](https://money.com/how-to-buy-i-bonds/), it’s crucial to understand the basics of how the savings bonds work. The current 5.27% rate is a combination of two separate rates: a variable rate and a fixed rate. - The **variable rate** is pegged to inflation over the past six months. (In this case, that's March to September.) It changes every six months for all bond holders. Due to the straightforward nature of this rate, it is fairly easy to predict. It cannot go below 0%. - The **fixed rate** is locked in at the time of purchase, and it will remain unchanged until the bond matures in 30 years or is cashed out, whichever comes first. The Treasury is cryptic about how it calculates this rate. It may or may not change every six months. It also cannot go below 0%. Starting Wednesday, the six-month variable rate will be 1.97%, and the fixed rate will be 1.3%. Together, the overall annualized rate for I bonds purchased through April will be 5.27% What’s notable about the new I bonds rate is not the overall 5.27% yield but the fixed rate. The fixed rate hasn’t exceeded 1% since before the Great Recession. For long-term investors, the fixed rate is important because you can lock it in for upwards of 30 years. Meanwhile, the variable rate will change every six months. As an example of how critical the fixed rate is, look no further than the folks who bought lots of I bonds when the rate was an [eye-popping 9.62%](https://money.com/inflation-proof-bonds-high-interest-rate/) last May. The Treasury Department says it sold billions worth in the first week alone; in the last week the rate was applicable, the website had so many visitors it crashed. While the inflation-based rate was extremely high, the fixed rate was 0%. Without a fixed rate boosting the yield, those same I bonds purchased in 2022 are now earning only 3.94% (the inflation-portion only) — versus the 5.27% rate for I bonds purchased starting in November. ## How I bonds work I bonds are a unique investment that work differently than any other type of bond or savings account. For starters, there’s a $15,000 individual purchase limit per calendar year ($10,000 of electric I bonds through TreasuryDirect and up to $5,000 of paper I bonds purchased with your tax refund dollars at the time of filing). Additionally, you won’t be able to cash them out for 12 months, emergency notwithstanding. And if you cash them out within five years, you lose the last three months of interest. If, for example, you cashed an I bond out after 20 months, you would only receive the first 17 months of interest. I bonds can accrue interest for up to 30 years, and they aren’t subject to state or local taxes. You must pay federal taxes on them, but you can choose to report earnings annually or wait until you cash them out. You may even be able to get the federal taxes waived if you used the bonds to pay for certain higher education expenses for yourself or a qualifying relative. "I bonds are a simple investment to track, earn tax-deferred interest, and can never lose a cent of accumulated value," Enna wrote. "An I bond with a fixed rate of 1.3% remains attractive and a worthy investment." ## What about CDs? At some of the [best banks](https://money.com/best-banks/) and [credit unions](https://money.com/best-credit-union/), rates for certificates of deposit (CDs) are looking very attractive lately, too. In some cases, you might be able to find a [CD with up to a 6% APY](https://money.com/cd-6-percent-apy-credit-union/). CD terms commonly range from three months to five years, with the highest rates typically offered on one-year CDs. Similar to I bonds, CDs have an early withdrawal penalty (usually three or four months of interest). With CDs, rates can change on the whim of the financial institution — and while currently high, CD earnings aren’t designed to protect your savings from inflation in the long run (like I bonds are). Those earnings are also subject to both federal and state taxes. On the other hand, I bond rates change with regularity. And if the bond is purchased with a fixed rate — like the 1.3% rate now — you can lock that rate in for up to 30 years. The tax benefits are also notable if you live in a state with income tax, since I bonds aren’t subject to such taxes. (Fidelity has a [calculator](https://digital.fidelity.com/prgw/digital/taxyieldcalc/) that you can use to calculate after-tax earnings with CDs to make a fairer comparison with I bonds.) 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