{"id":43563,"date":"2026-05-05T12:57:21","date_gmt":"2026-05-05T12:57:21","guid":{"rendered":"https:\/\/financialrush.com\/?p=43563"},"modified":"2026-05-05T12:57:21","modified_gmt":"2026-05-05T12:57:21","slug":"should-you-buy-series-i-bonds-amid-higher-inflation-what-experts-say","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=43563","title":{"rendered":"Should you buy Series I bonds amid higher inflation? What experts say"},"content":{"rendered":"

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Natalia Gdovskaia | Moment | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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As consumer prices climb<\/a> amid the Iran war, some investors are looking for ways to combat inflation<\/a>. <\/p>\n

One option, Series I bonds<\/a> \u2014 a government-backed, nearly risk-free asset \u2014 could now be more attractive, some experts say. But others may prefer more flexible options. <\/p>\n

Newly purchased I bonds will pay 4.26% annual interest<\/a> through Oct. 31, up from the 4.03% yield<\/a> offered through April 30, the U.S. Department of the Treasury announced last week.\u00a0\u00a0\u00a0<\/p>\n

When inflation rises, “I bonds definitely have more appeal,” said Ken Tumin, founder of DepositQuest.com, a blog that tracks I bond rates, among other deposit accounts.\u00a0\u00a0\u00a0<\/p>\n<\/div>\n

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Demand has previously surged for I bonds<\/a> amid soaring inflation. With yields tied to the consumer price index, I bond rates hit a record high of 9.62%<\/a> in May 2022, and investors poured into the assets.<\/p>\n

Many have redeemed I bonds<\/a> as prices cooled. But there’s been more interest since the March inflation data, according to David Enna, founder of Tipswatch.com, a website that tracks Treasury inflation-protected securities, or TIPS, and I bond rates.\u00a0\u00a0\u00a0<\/p>\n

The consumer price index, or CPI, a key inflation gauge,\u00a0increased 3.3%<\/a>\u00a0year over year in March 2026, up from 2.4% in February, the Bureau of Labor Statistics reported in April. This data reflected higher gasoline<\/a>\u00a0and\u00a0other rising costs<\/a> from the Iran war, and contributed to the latest 4.26% I bond rate.<\/p>\n<\/div>\n

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“I think 4.26% is very competitive,” compared to Treasury bills or money market funds, said Enna, who doesn’t expect inflation to ease within the next few months. <\/p>\n

As of May 4, most Treasury bills<\/a>, or T-bills, with terms of four weeks to 52 weeks, were paying around 3.7%. Meanwhile, some of the biggest money market funds had similar yields, according to\u00a0Crane Data<\/a>. <\/p>\n

While there’s an I bond electronic purchase limit of $10,000 per person per year, Enna and Tumin both like asset for shorter-term cash, such as adding to an emergency fund, depending on your timeline. <\/p>\n

I bond rates have a\u00a0variable and fixed rate part<\/a>. Upon purchase, you lock in a fixed rate, which is currently 0.90%, until you sell. But the variable portion, currently 3.34%, adjusts every six months, based on when you bought the asset. <\/p>\n<\/div>\n

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The downsides of I bonds <\/h2>\n
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If you’re considering I bonds, it’s important to know the trade-offs, particularly when compared to other assets, experts say.<\/p>\n

I bonds aren’t as flexible as T-bills, money market funds or high-yield savings accounts. For newly purchased I bonds, you can’t access the money for at least one year, and there’s a three-month interest penalty for selling within five years. <\/p>\n

If your investing timeline is only around one year, Enna recommends T-bills over I bonds because the three-month interest penalty drags down your yield. <\/p>\n

Plus, you must buy I bonds via TreasuryDirect<\/a>, which is extra work if you don’t have an existing account and aren’t familiar with the platform, experts say. <\/p>\n

“Overall, the hassle in dealing with them is not worth the menial marginal benefit on $10,000,” said certified financial planner Dinon Hughes, partner with Nvest Financial in the greater Boston area.<\/p>\n<\/div>\n

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