Skip to Content
Tally logo

I-Bond Rate Predictions: Is Now the Right Time to Buy?

I-bonds use inflation-based interest rate changes to help retain your money’s spending power.

Justin Cupler

Contributing Writer at Tally

December 9, 2022

This article is provided for informational purposes only and should not be construed as legal or investment advice. Always consult with a professional financial or investment adviser before making investment decisions.

When inflation dominates the news, many people are left worrying about the purchasing power of their money and the growth of their investments. Traditional investments based on the stock market tend to lose value during inflation.

Fortunately, I-bonds from the U.S. Treasury help protect the purchasing power of your savings by adjusting to rising prices twice annually. When we get close to rate adjustment dates, experts look at inflation trends and make I-bond rate predictions as you near one of the rate-adjustment dates.

Below, we outline what I-bonds are, how they work, the most recent I-bond rate predictions and the actual rate the Treasury released on November 1, 2022.

What are I-bonds?

A series I savings bond (often called an I-bond for short) is a savings bond issued by the U.S. Treasury. The purpose of this investment is to protect your money from inflation. Even though the U.S. Treasury issues an I-bond, it’s not the same as a Treasury bond.

Each calendar year, you can make up to $15,000 in I-bond purchases; $10,000 in electronic bonds, and $5,000 in paper bonds.

You can purchase electronic bonds online at and paper I-bonds with your IRS tax refund.

Who’s eligible to buy I-bonds?

To invest in I-bonds, you must have a Social Security number and either be a U.S. citizen, a U.S. resident or a civilian employee. You can buy these bonds for yourself, your child or someone else.

How does an I-bond’s value grow?

I-bonds have both a fixed interest rate and a variable inflation rate. These rates combine to form the I-bond’s composite rate. This composite rate is how your money grows.

A bond will have a fixed interest rate when you purchase it. This rate is adjusted every May 1 and November 1, but the fixed rate that was in place when you bought the bond will remain for the life of the bond.

There’s also the inflation rate, the adjustable interest rate that the Treasury updates with a new rate semiannually, also on May 1 and November 1. However, unlike the fixed interest rate, your inflation rate will change to match the new rate every six months based on when the Treasury issued the bond.

For example, if you received a bond in January, your composite rate will change every July 1 and January 1.

The Treasury bases the inflation rate on fluctuations in the pricing of all items on the Consumer Price Index for all Urban Consumers (CPI-U). The CPI-U is the monthly measure of the average change in prices consumers pay for goods and services. This is also the basis for the national inflation rate. So, as the inflation rate changes, the I-bond inflation rate also changes to retain its purchasing power.

For example, from May 2022 to October 2022, the I-bond rate was 9.62 percent. This was based on a 0 percent interest rate and a 4.81 percent half-year inflation rate.

An I-bond also has semiannual compounding interest; every time the bond inflation rate changes, the Treasury calculates the previous six months’ worth of interest and adds it to your previous balance. Then, it applies the new, composite rate to the new total balance.

For example, if you had a $10,000 bond that earned $300 over six months, your new balance would be $10,300. The interest calculated over the next six months would be based on the total $10,300 balance instead of the principal balance of $10,000.

Keep in mind that your composite rate may not increase at the six-month mark. In some cases, it may even decrease. If inflation remains flat or deflation occurs, you could see your composite rate fall to match that, maybe even below your fixed rate. However, your composite rate will never fall below 0 percent. Because of that and inflation adjustments, I-bonds are a low-risk investment. If you’re interested in investing in inflation-protected I-bonds, check with a financial adviser to see whether this is a better option than a savings account, the stock market or other investments.


When can I cash in an I-bond?

The life of the bond is 30 years, meaning it earns interest for 30 years unless you redeem it before then. But this doesn’t mean you must wait 30 years to cash it out.

You can cash out a bond as early as 12 months after receiving it. However, if you cash it out before five years, you’ll receive a three-month interest penalty. So, if you cash out in month 23, you’ll receive only 20 months of interest.

Another consideration is federal tax. You’ll have to pay federal income tax on the amount of interest your I-bond earns annually. It’s also subject to federal estate, gift and excise taxes.

I-bonds aren’t subject to income tax, but they are subject to state estate or inheritance taxes.

When reporting earnings from an I-bond on your taxes, you can either report it annually on your tax return or just once when you cash out the I-bond.

What were the I-bond rate predictions for November 2022?

Over the past few months, financial experts have been watching inflation and trying to predict what the new rate would be in November 2022.

In August 2022, Susan Tompor, a financial columnist for the Detroit Free Press, predicted I-bond rates might increase to over 10 percent. This was based on inflation projections being made at that time.

Another financial guru was also expecting double-digit rates in August 2022. Jennifer Lammer from Diamond NestEgg predicted a 12.4 percent rate based on the semiannual inflation rate and the CPI-U numbers from March through June. However, Mish Shedlock was more conservative, pegging the November 2022 update at 7.9 percent.

By early October, The Motley Fool reported that the rate was expected to fall to around 6 percent due to cooling inflation. But by late October, I-bond rate predictions were slightly higher at 6.47 percent and 6.48 percent.

What’s the current rate as of November 2022?

The Treasury officially announced on November 1, 2022, the actual composite rate would be 6.89 percent. This is based on combining a 0.4 percent fixed rate with a 6.48 percent annualized inflation rate and is mostly in line with the final predictions made at the end of October.

This rate applies to all I-bonds purchased between November 1, 2022 and April 28, 2023. 

In addition, bonds purchased before November 1, 2022 will also receive this new rate. But unless you bought your bond in May or November, you won’t see the change in November. Instead, you’ll receive the new rate when it’s time for your bond’s next six-month interest rate change. 

For example, if you bought your bond in June, your rate will be changing in December. But if you originally bought your bond in March, it won’t change until next March.

Keep in mind though, your rate won’t change based on the full composite rate. It will change to 6.48 percent, but your fixed rate will be equal to the rate you received when you bought your bond. 

On May 1, 2023, the new six-month composite rate will be announced based on the CPI numbers.

I-bonds help offset inflation

Because they never lose money and adjust with inflation every six months, I-bonds could be a safe place to stash a portion of your savings. As of November 2022, you’ll earn an interest rate of 6.89 percent. This rate will change again in May 2023.

But before diving all in on I-bonds, speak with a financial adviser to understand future I-bond rate predictions and ensure it’s a sound personal finance decision for you.

Are you struggling to come up with the free cash needed to start investing in I-bonds due to excessive high-interest credit card debt? Check out the Tally† credit card debt repayment app. Our app helps you manage your credit card payments, and Tally offers a lower-interest personal line of credit, allowing you to efficiently pay off higher-interest credit cards. 

To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. The APR (which is the same as your interest rate) will be between 7.90% and 29.99% per year and will be based on your credit history. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 to $300.