I-Bond vs Treasury Comparison 2026 Calculator

I-bonds offer inflation-protected returns (fixed rate + semi-annual CPI adjustment) with 30-year maturity. Treasuries offer nominal returns with flexible maturities (4-week to 30-year). Both state-tax-exempt. I-bonds win when inflation surprises upward; Treasuries win when inflation is below expectations.

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I-Bond Mechanics

I-bonds (Series I) combine fixed rate (set at issuance, locked for 30 years) + semi-annual inflation rate (based on CPI-U). May 2026 example: fixed 1.30%, inflation rate ~3.2% = composite ~4.55% for first 6 months. Adjusts every May 1 and November 1. Federal tax deferred until redemption. State-tax-exempt. Cannot redeem first 12 months; redemption between months 13-60 forfeits last 3 months interest.

Treasury Mechanics

Treasury bills (4-52 week), notes (2-10 year), bonds (20-30 year). Pay fixed coupon (notes/bonds) or sold at discount (bills). Federal tax annual. State-tax-exempt. Sell anytime via secondary market. Yields move with Fed Funds + market expectations. As of May 2026: 4-week ~4.5%, 1-year ~4.6%, 10-year ~4.4%.

When Each Wins

I-bonds win: high or unexpected inflation, very long holding period (30 years), households at $10K annual cap. Treasuries win: when you can predict inflation (low or stable), need liquidity within 12 months, want to invest more than $10K/yr. Most diversified investors use both — I-bonds for inflation hedge in long-term bucket, Treasuries for predictable short-term yield.

Source: TreasuryDirect.gov I-Bond Rate History, Federal Reserve H.15 Daily Treasury Yields. Last updated: May 2026.