The full article continues below these offers from o༒🌌ur partners.

How I Bonds Are Designed to Always Be൩at Inflation

U.S. Treasury I bonds are so-named because they are specifically designed to pay more on your cash than inflation eats away from your buying power. You generally won't earn a huge return, but you'll always stay a step ahead of the latest 澳洲幸运5官方开奖结果体彩网:inflation trend.

I bonds accomplish this by having a variable interest rate, allowing the Treasury to adjust its rate over time as inflation changes. But while U.S. inflation is measured and reported monthly, I bonds simplify things by adjusting their rate just twice a year, taking into account the inflation trend of the previous six months. A new rate is calculated and announced every May 1 and Nov. 1.

The next I bond rate announcement is coming up next week, alongside much talk in the news about how President Trump's across-the-globe tariff policy could 澳洲幸运5官方开奖结果体彩网:push inflation rates back up after they'꧟ve recently been drifting lower. So, does this likely upward p🌼ressure on consumer prices suggest a higher I bond rate will be announced on May 1?

Here's why the answer is both yes and no. (Spoiler: It's all in the timing.)

What's Expected for I Bond Rates on May 1—and Beyond

Two weeks ago, we reported Investopedia's calculations for 澳洲幸运5官方开奖结果体彩网:the next I bond rate—which were possible for existing I bonds when the latest 澳洲幸运5官方开奖结果体彩网:Consumer Price Index (CPI) reading was released on April 10. The answer is that I bond rates 𓆉will climb almost a full percentage point on May 1, and the rates different bonds will earn—based on their issue date—is shown in the table below.

But those increases aren't tied to any inflation that might result from the new tariffs. That's because I bond rates are calculated using the past six months' worth of inflation data. 澳洲幸运5官方开奖结果体彩网:The April CPI report shows the final month of data for the calculation, and it indicates March inflation numbers. President Trump♏ didn't put tariffs into effect until April 2, however.

So bond rates are increasing on May 1, but only because of inflation read𓃲ings from October 2024 through March 2025. They will not riꦯse next week because of tariff activity.

That said, tariffs could certainly trigger a future I bond rate increase if they cause inflation to tick higher over the next few months. However, the soonest we would see that impact is the Nov. 1 rate announcement. And whether the November rate will be higher or lower than the May rate is impossible to predict, as six months of future inflation readings are never 🌠easy to 𝄹forecast.

Add to this that the current environment, with on-again, off-again tariffs, 澳洲幸运5官方开奖结果体彩网:is highly uncertain, and it's anybody's guess what the full six-month inflation trend will be from April through October of this year.

How Much Will a Newly Purchased I Bond Pay?

Any new I bond purchased in May could pay a different rate than an I bond purchased in April. That's because in addition to an inflation-adjusting component, each I bond has a permanent fixed-rate component. The Treasury doesn't share how it calculates this, so we cannot predict what it will announce as the fixed-rate component for bonds issued on or after May 1.

There is certainly a chance, however, that it will decline from the current 1.20% level. If you'd like to ensure you've locked in that 1.20% fixed rate (which means your I bond will always out-pay the inflation trend by 1.2 percentage points), you can still secure it by purchasing a new I bond before April 30. Note, however, that you'll need to start the transaction a couple of days ahead of that to make sure the purchase occurs in April.

Alternatives to I Bonds

Instead of—or in addition to—I bonds, you may want to put some of your savings in a top-paying CD, or even a high-yield savings account. Though they won't adjust to beat inflation like an I bond will, their rates are very competitive right now and beat the current 2.4% inflation rate. We rank the top rates for these products every business d🦄ay, and you can find our latest rankings in the links below.

How We Find the Best Savings and CD Rates

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account's minimum initial deposit must not exceed $25,000. It also cannot specify a maximum deposit amount that's below $5,000.

Banks must be available in at least 40 states to qualify as nationally available. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, 澳洲幸运5官方开奖结果体彩网:read our full methodology.