I Bond Rates Jump to 3.98% for⁤ New Purchases

The U.S. treasury has announced a⁣ significant increase in the interest rate for Series I⁣ savings bonds, commonly known as I bonds. For new bonds purchased between May 1 and October 31, 2025,⁢ the rate will climb to 3.98%. This marks a considerable jump from the previous rate of 3.11% for bonds issued in the preceding six months.

I ⁣bonds are a popular savings vehicle because they ⁤offer protection against inflation.Their interest rate is composed of two parts: a⁣ fixed rate that remains the same for the life of the bond, and an inflation‍ rate that is adjusted every six months based on the Consumer Price Index (CPI). This dual-rate structure⁢ means ⁢that while the fixed rate is set ⁢at the time of purchase, the overall rate you⁢ earn can fluctuate.

For existing I‍ bond holders, this rate adjustment is also welcome news. Your next six-month interest rate will ⁢also see an increase,climbing‍ by nearly a full⁣ percentage⁢ point.This means that‍ even if you purchased I bonds at an earlier rate, you’ll benefit from the improved yield in the coming months.

Understanding I Bonds: A Flexible Savings Option

I bonds offer a⁤ unique blend of security and potential growth,⁢ making them an attractive option for many savers. You ⁣can hold‍ an I bond⁢ for as little as one year, or provided that 30 years, providing adaptability for various financial goals. The key⁢ feature is the variable rate, which adjusts ⁢every six months, ensuring your⁣ savings keep pace with inflation.

How We Find the Best savings and ⁤CD Rates

At Investopedia, we are committed to helping you find the best ‍places to put your hard-earned money. Every ⁢business day,our team meticulously tracks the interest rate ⁣data from⁢ over 200 banks and‍ credit unions across the⁤ nation that offer savings accounts and Certificates of Deposit (CDs). This allows us to compile daily rankings ⁢of the top-paying accounts available to ⁤customers nationwide.

To ensure our recommendations⁢ are trustworthy and accessible, we have strict qualification criteria. Any institution featured on our lists must be federally insured – either by the FDIC for ‍banks or the NCUA ⁢for credit unions. We also ensure that the minimum⁤ initial deposit⁢ required for ⁣an account does not exceed $25,000, and that there isn’t a maximum deposit limit set below $5,000.

Moreover,for an institution to ⁤be considered “nationally ⁢available,” it⁤ must have a presence in at least 40 states. While ⁢some credit unions may have membership requirements that can be met through‍ charitable donations, we exclude those where the donation requirement is $40 or more. This ensures that our featured credit unions are broadly accessible. For⁤ a more in-depth look at our⁢ selection process⁢ and the factors we consider, we encourage you to read our full methodology.