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With the I Savings Bonds rate at 7.12%, I'm thinking about buying some. From my understanding:

  • You have to hold them for at least one year
  • If you cash them out before 5 years, you lose the previous three months of interest.

My question is, if you buy a fixed rate bond, do you get that same rate until you cash it out? For example, if I buy an I Savings Bond today, would I get that 7.12% every year until I cash out if I just hold it? Or, do you have to re-buy the bond every year?

Thank you.

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If you bought a fixed rate bond, you would receive that % coupon rate annually. However, series I bonds are not fixed rate, they are floating around a reference rate, the rate of inflation. They only change rate once every 6 months though, so if you bought one on the day the rate changed to 7.12%, you would be guaranteed 6 months of interest at a 7.12% annual rate. Anything beyond that is up in the air, with the only rate guarantee being that it will match the current rate of inflation at that time.

Series I bond FAQs

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  • To give a little more detail, the rate is changed every six months in May and November, but applies to your particular bond every six month from your purchase date. So if you buy a bond the day before the rate changes in April, you won't get the updated rate until October. But if you bought the bond in May, you'd have the updated rate immediately. You're guaranteed a 6-month interest rate regardless of when you buy it relative to the rate update date.
    – Nuclear Hoagie
    Commented Apr 15, 2022 at 14:44

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