Series I savings bonds earn a composite rate built from a fixed component and an inflation component. The inflation portion resets every six months based on a published schedule.
Access is restricted
An I bond cannot be redeemed during its first twelve months. Redeeming before five years generally forfeits the most recent three months of interest.
That makes it a poor home for cash that may be needed next week.
The headline rate does not last forever
The inflation component changes, and the fixed component stays with that bond. Two bonds purchased in different periods can therefore earn different composite rates.
Check the current Treasury table rather than relying on an old article.
Taxes have special rules
Federal income tax can often be deferred until redemption or final maturity, while state and local income tax treatment differs. Education exclusions have conditions.
TreasuryDirect provides the governing details.
Sources
- U.S. Department of the Treasury, TreasuryDirect, Series I Savings Bonds.