The headline I Bond rate changes every six months, but the fixed rate is often the more important number for long-term buyers. For I Bonds issued from May 1, 2026 through October 31, 2026, the fixed rate is 0.90%.
That 0.90% fixed rate stays with the bond for as long as you own it, up to 30 years. Future inflation adjustments will rise or fall, but the fixed-rate piece remains attached to your specific bond.
For the full composite rate, see I Bonds May 2026 Rate: How the 4.26% Composite Rate Works. If you are comparing inflation-linked securities, read TIPS vs I Bonds vs EE Bonds in 2026.
Fixed Rate vs Inflation Rate
An I Bond rate has two main parts:
- Fixed rate: set when you buy the bond and lasts for the life of the bond.
- Inflation rate: adjusts every six months based on inflation data.
The composite rate combines both pieces. A high inflation component can make the current six-month rate look attractive, but it may disappear at the next reset. The fixed rate is more durable.
Why 0.90% Is Valuable
An I Bond with a positive fixed rate earns inflation plus that fixed component, subject to the Treasury’s composite-rate formula. If inflation stays positive over time, the bond can maintain purchasing power better than a nominal savings account.
The fixed rate is especially valuable for investors who may hold I Bonds for many years. A bond purchased with a 0.00% fixed rate and a bond purchased with a 0.90% fixed rate can have the same inflation component later, but the 0.90% bond should generally earn more.
Should You Redeem Older I Bonds to Buy New Ones?
Some investors own older I Bonds with a 0.00% fixed rate and wonder if they should redeem them to buy new bonds at 0.90%.
The answer depends on:
- whether the old bond is past the one-year lockup
- whether redeeming triggers the three-month interest penalty
- the old bond’s current composite rate
- your tax situation
- your remaining annual purchase limit
- whether you need liquidity
Do not compare only fixed rates. If redeeming an older bond creates taxable interest, loses three months of interest, and uses up your annual purchase limit, the trade may not be worth it.
For redemption timing, see When Can I Cash Out I Bonds?.
I Bond Fixed Rate vs TIPS Real Yield
I Bonds and TIPS both provide inflation-linked returns, but the fixed-rate comparison is not perfect.
| Feature | I Bonds | TIPS |
|---|---|---|
| Inflation measure | CPI-U adjustment | CPI adjustment to principal |
| Fixed/real yield | Fixed rate set at purchase | Market real yield at purchase |
| Market price risk | No market price if redeemed through TreasuryDirect | Market price fluctuates |
| Purchase limit | Annual limit | Much higher practical limits |
| Tax complexity | Can defer federal tax | Annual tax on interest and inflation adjustments in taxable accounts |
| Liquidity | 12-month lockup | Marketable, but price can move |
If TIPS real yields are much higher than the I Bond fixed rate, TIPS may be more attractive for larger portfolios. If you value no market price volatility and tax deferral, I Bonds may still win for smaller amounts.
When a Positive Fixed Rate Is Less Important
The fixed rate matters less if you plan to redeem soon after the one-year lockup. A short-term buyer mainly cares about the first six to fifteen months of composite rates and any early-redemption penalty.
Example: If you buy in May 2026 and redeem after 15 months, you will lose the last three months of interest. In that case, the early composite rates matter more than the 30-year value of the fixed rate.
Bottom Line
The May-October 2026 I Bond fixed rate of 0.90% is important because it stays with the bond for its full life. The composite rate gets the attention, but the fixed rate is what separates one I Bond vintage from another over long holding periods.
Related Reading
- I Bonds May 2026 Rate: How the 4.26% Composite Rate Works
- When Can I Cash Out I Bonds?
- TIPS vs I Bonds vs EE Bonds in 2026
- Treasury Bills vs CDs vs High-Yield Savings in 2026
Sources
- TreasuryDirect, May 2026 savings bond rates: https://www.treasurydirect.gov/news/2026/release-05-01-rates/
- TreasuryDirect, I Bond rate structure: https://www.treasurydirect.gov/savings-bonds/i-bonds/i-bonds-interest-rates/
- TreasuryDirect, TIPS: https://www.treasurydirect.gov/marketable-securities/tips/