I-Bond May 2027 Fixed-Rate Decision Calculator
Treasury resets Series I Bond fixed rate every May 1 and Nov 1. Current fixed rate 1.20%. Should you buy now or wait for the May 2027 reset? Calculate based on your inflation forecast. Source: treasurydirect.gov.
How I-Bond Composite Rate Works
Composite Rate = Fixed Rate + (2 × Variable Rate) + (Fixed × Variable). Fixed Rate set when bought, locked for 30 years. Variable Rate set every May 1 and Nov 1 based on prior 6-month CPI-U change. Current composite ~3.11% reflects 1.20% fixed + ~1.90% annualized inflation. Source: treasurydirect.gov.
Why Fixed Rate Matters More Than You Think
Fixed rate compounds over the bond's 30-year life. A 0.30% higher fixed rate on $10,000 over 30 years = ~$1,000+ in extra purchasing power. Locking in higher fixed rate beats waiting for marginally higher variable (which adjusts every 6 months anyway). Historical fixed rates: 0.00% (2008-2018), 0.50-1.30% recent peaks.
Timing the Reset Window
Strategy: if you expect the next May/Nov reset to LOWER fixed rate, buy NOW to lock current. If you expect HIGHER fixed rate, wait. Treasury sets fixed based on long-term real yields (5/10-year TIPS). If TIPS real yields rise, expect fixed to rise. If TIPS yields stable/falling, expect fixed to stay or fall.
Annual Purchase Limit and Cycle Strategy
$10,000/SSN/year electronic limit + $5,000 via tax refund (paper). Strategy: max December purchase to lock current year's fixed + capture early-year interest, then buy again in January (new year limit). Effectively $20,000 within 5 weeks. Source: treasurydirect.gov.
Frequently Asked Questions
When does Treasury reset I-Bond fixed rate?
Every May 1 and November 1. Fixed rate then applies to bonds purchased in the following 6 months. Source: treasurydirect.gov.
Should I buy I-Bonds now or wait?
Buy now if current fixed rate is high and you expect the next reset to lower it. Wait if you expect reset to raise fixed rate.
Can I buy I-Bonds with tax refund?
Yes — IRS Form 8888 allows up to $5,000 paper I-Bond purchase with refund. This is on top of the $10,000 electronic limit per SSN.
What's the I-Bond holding period?
1 year minimum lockup, no redemption. Redeem 1-5 years loses last 3 months' interest. Hold 5+ years for full yield, up to 30-year maturity.
Is I-Bond interest taxable?
Federal yes, state/local NO. Tax-deferred until redemption — you can defer all tax for 30 years to maturity. Education exclusion may apply for college tuition.