I bonds go to 5.4% November 1. TIPS pay nearly twice the fixed rate.

September CPI set the I bond's November rate near 5.4%. Only its 1.3% fixed part lasts, and a 5-year TIPS sold October 22 pays about 2.6% over inflation.

The Editors · Money · 8 min read · Oct 16, 2026

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By the numbers

4.08%I bond inflation rate from November 1, 2026, set by September CPI

1.30%forecast I bond fixed rate for November (TIPSWatch estimate), the only part locked for 30 years

2.58%real yield on a 5-year TIPS, October 15, 2026

October 22Treasury auctions $26 billion of new 5-year TIPS

$776extra a 5-year TIPS earns on $10,000 versus a November I bond, before tax (our math)

I bonds bought from November 1, 2026 should pay about 5.4% for their first six months. The inflation half of that is already fixed: September's consumer price index came out on October 14 and set the I bond's variable rate at 4.08% (TIPSWatch, October 14, 2026). Treasury adds a fixed rate on November 1, and the best public forecast puts it at 1.30% to 1.40%.

That 5.4% gets the headlines. The fixed rate is the part that matters, because it's the only piece you keep for the bond's 30-year life. And on October 15 a 5-year Treasury Inflation-Protected Security paid a real yield of 2.58% (Federal Reserve H.15, October 15, 2026). That's nearly twice the I bond's expected fixed rate, for the same inflation protection.

Treasury sells $26 billion of new 5-year TIPS at auction on October 22 (TreasuryDirect auction announcement, October 15, 2026). If you're choosing where inflation-protected savings go this month, that auction is the comparison to run before November 1.

How the November I bond rate is built

An I bond pays two rates combined. The fixed rate never changes for the life of the bond. The inflation rate resets every May 1 and November 1 (TreasuryDirect). Treasury's formula is the fixed rate, plus twice the six-month inflation rate, plus the fixed rate times the six-month inflation rate.

The six-month inflation rate comes from the non-seasonally adjusted CPI-U. It stood at 330.213 in March 2026 (TIPSWatch, April 10, 2026) and 336.940 in September (BLS, October 14, 2026). That's a 2.04% rise in six months, so the annualized inflation rate is 4.08%, up from 3.34%.

Energy did most of the work. The BLS energy index rose 20.4% in the year to September, while prices outside food and energy rose 2.6% (BLS). Headline inflation hit 3.7%.

Here's what the formula gives at each fixed rate in play:

Fixed rate	Composite rate, first six months
0.90% (bonds bought May to October 2026)	5.00%
1.30% (low end of the November forecast)	5.41%
1.40% (high end of the forecast)	5.51%

The 0.90% row is what an October buyer gets once the bond rolls into the new inflation rate. Bonds bought now earn the current 4.26% composite for six months first (TreasuryDirect). The 1.30% and 1.40% figures are a forecast by David Enna of TIPSWatch, based on how Treasury has set the fixed rate against TIPS yields in the past. Treasury publishes no formula for it.

The fixed rate against a 5-year TIPS

Both products pay inflation plus a real return. The I bond's real return is its fixed rate. The TIPS's real return is the yield you lock in when you buy. The October 22 auction sets its own yield, and the market's 2.58% on October 15 is the best guide to where it lands. So the comparison comes down to two numbers: about 1.30% against roughly 2.58%.

That gap opened fast. Treasury's April 5-year TIPS auction cleared at a real yield of 1.367% (TIPSWatch, April 23, 2026). Real yields have since climbed to their highest in nearly 20 years (TIPSWatch, October 11, 2026), and the 10-year TIPS stood at 2.78% on October 15 (Federal Reserve H.15). The I bond's fixed rate moved the other way: it was 1.30% for bonds issued from November 2023 to October 2024, and 0.90% for the last two issue periods (TreasuryDirect).

We ran $10,000 held for exactly five years. For inflation we used the market's own estimate, the gap between the 5-year Treasury's 4.91% and the 5-year TIPS's 2.58% on October 15, which is 2.33% a year. Both products get the same inflation, so only the real rate differs.

$11735$11969$12745

View as table

$10,000 held five years, before tax
label	$10,000 held five years, before tax
I bond, 0.90% fixed	$11735
I bond, 1.30% fixed	$11969
5-year TIPS, 2.58% real	$12745

Source: Market Anarchy calculation; real yields from Federal Reserve H.15, October 15, 2026; I bond fixed rates from TreasuryDirect and the TIPSWatch forecast

Before tax, the TIPS ends $776 ahead of a November I bond. The real figures are a projection: the inflation path will differ, but it differs for both equally, and the real-rate gap stays.

What tax does to the gap

Tax narrows it, and this is where the I bond earns its place. Both are free of state and local income tax. The difference is timing at the federal level.

I bond interest is federal-taxable only when you cash the bond in. A TIPS in a taxable account owes federal tax every year on the interest and on the inflation added to principal, even though you don't receive that principal until maturity (TreasuryDirect).

At a 22% federal rate, in today's dollars, our five-year figures come out like this:

November I bond, 1.30% fixed: $281 of real gain after tax.
5-year TIPS in a taxable account: $779 of real gain after tax.
5-year TIPS in an IRA: $1,358 of real gain, with tax handled by the account's own rules.

The deferral helps the I bond. It doesn't close a 1.28-point gap in the real rate.

When the I bond still wins

The TIPS figures assume you hold to maturity. A TIPS sold early fetches whatever the market pays that day, and in 2022 Vanguard's short-term TIPS fund still lost 2.96% while inflation ran at 6.5% (TIPSWatch, October 11, 2026). An I bond never loses principal. After 12 months you can cash it in, and before five years the cost is the last three months of interest (TreasuryDirect).

So the I bond suits money you may need in one to five years, held outside a retirement account. It also suits savings headed for qualified higher education, where the interest may be tax-free. And its combined rate can't drop below zero (TreasuryDirect), while a TIPS protects only its original principal, at maturity.

Both beat a bank deposit by a wide margin. The FDIC's national average savings rate is 0.37% (FDIC, September 21, 2026), the same rate we flagged when Apollo warned of an agentic bank run.

If you hold I bonds with a 0% fixed rate

Treasury set the fixed rate at 0.00% from May 2020 through October 2022 (TIPSWatch). Buyers took nearly $7 billion of I bonds in October 2022 alone, chasing the 9.62% composite before it reset (CNBC, November 1, 2022). Those bonds now pay inflation and nothing more. From their next reset they earn 4.08%, all of it inflation.

A 5-year TIPS pays inflation plus 2.58%. Moving costs two things. Cashing in triggers federal tax that year on all the interest the bond has deferred. And bonds younger than five years lose three months of interest, so anything bought from November 2021 to October 2022 pays that penalty until its fifth anniversary, which falls between next month and October 2027. Add up the tax and the penalty, then set the total against 2.58 points a year of extra real return.

What to watch before November 1

October 22, 1 p.m. ET: the 5-year TIPS auction closes (TreasuryDirect). Non-competitive bids, which take whatever yield the auction sets, close at noon. The minimum is $100. The bond matures October 15, 2031.
November 1: Treasury announces the fixed rate. Anything above 1.20% beats every issue since May 2024.
The I bond limit: $10,000 of electronic I bonds per person per calendar year (TreasuryDirect). At the TIPS auction, a non-competitive bid can go up to $10 million.

The same September inflation report that set the I bond rate also set the 2027 Social Security COLA at 3.6%. And the climb in real yields behind the TIPS figure is the one we tracked when the 10-year hit 5.29%.

Our guide, kept current: T-bills or a savings account in 2026: what cash earns after tax