“Oh no, not again” – Rod Stewart, “Infatuation,” 1984*
Above is a post from r/Bogleheads, the corner of Reddit for folks who follow Jack Bogle - the founder of Vanguard and the patron saint of low-cost index funds. The headline says I Bonds are going to be popular again.
It's right. That's what worries me. (And I count myself a Boglehead.)
Here's what happened. Yesterday's inflation report set the I Bond's new variable rate at 4.08%, up from 3.34%. And the fixed rate, which Treasury announces on November 1st, is widely expected to climb from 0.90% to at least 1.30%.
Quick glossary, because I hate jargon. An I Bond is a savings bond from the U.S. Treasury that pays you two rates added together. The fixed rate is set the day you buy & never changes. The variable rate is the inflation piece, and it resets every six months based on the Consumer Price Index, or CPI - the government's measure of what stuff costs. Blend the two and you get the, "composite," rate, which is the headline number you'll see in every video.
If the fixed rate does land at 1.30%, the composite for new bonds works out to roughly 5.41%. (That's my arithmetic, not Treasury's. We find out for real on November 1st.) Next to a savings account, that looks fantastic. Cue the blog posts. Cue the YouTube thumbnails with the shocked faces.
I've seen this movie before. In May 2022 the composite rate hit 9.62%, and everyone with a keyboard or a ring light explained why I Bonds were the answer to a question nobody had asked.
Here's what the personal finance, “influencer,” videos skip.
The only place to buy an I Bond is TreasuryDirect.gov, the Treasury's own website. Not your brokerage account. Not inside your IRA or 401(k) - they're not allowed there. You can buy $10,000 per person, per year. Once you buy, you can't touch the money for 12 months. Cash out before five years & you forfeit the last three months of interest. And it all lives in its own little account, off to the side of everything else you own, where you have to remember it exists.
TreasuryDirect has gotten better over the years, especially with the ID.me verification process, but it’s still cumbersome – especially when compared to current technology. Frankly, I’ve had challenges walking clients through the purchase process before, and you don’t want to know how my (at the time) 94 year old mom handled it the last time I Bonds got all the attention.
OK, but the real question is still, is it worth it? Let's run the numbers.
A married couple who max out every year can put in $20,000. If the fixed rate is 1.30%, that's the part that actually pays them something above inflation: $260 a year. About $21.67 a month.
The variable piece? That's the inflation protection, and it's the part people get excited about. But all it does is keep your money buying what it bought before. It's my Peloton: lots of pedaling, and I end up staring out the same basement window. The fixed rate is the only distance actually traveled.
Now put that next to a retirement plan. Pick a round number - $1,000,000 saved. The entire, "bonus," from maxing out I Bonds is $260, or 0.026% of the portfolio. A 1% advisory fee on that same million is $10,000 a year. The whole I Bond edge is 2.6% of one year of that fee. And that's the generous version, because I'm crediting the I Bond with the full 1.30%, as if any alternative would earn nothing above inflation. Whatever you'd otherwise hold pays something, so the real edge is smaller. Also this assumes you can afford to invest the maximum amount. The effort is the same even if you can't, but the payoff is much lower.
A favorite question I always like to ask is what actually decides whether retirement works? It’s how much you save. What you pay in costs & taxes. Whether you stay put when markets fall. I Bonds usually move exactly none of those things in a material manner.
On top of that, think about who buys them. Folks who know what an I Bond is are, almost by definition, the folks already saving, already in low-cost index funds, already doing the important things. The aggravation is highest, and the payoff lowest, for exactly the people reading these articles.
Is it a bad product? No. It's safe, it's backed by the U.S. government, and it does protect against inflation. Yes, it's a fine bond. But (and you knew there was a but coming) there's a cousin that does the same job with less hassle. TIPS - Treasury Inflation-Protected Securities - are Treasury bonds whose principal rises with inflation. They can be held in a regular brokerage account or inside an IRA, with no $10,000 cap. The 10-year TIPS real yield (what it pays above inflation) was around 2.9% in early October, per Fed data. Compare that to a 1.30% I Bond fixed rate. TIPS come with their own catches: the price moves around if you sell before maturity, and in a taxable account you owe tax each year on the inflation adjustment even though you haven't received that cash. Nothing is free. I'd just like the full menu on the table before anyone queues up at TreasuryDirect.
And if you love them? If the once-a-year ritual of logging in brings you joy, buy your $10,000. I won't stop you. I'm just not going to make a video about it.
It's a fine bond. It's a lousy hobby.
PS - If you want help with the things that do move the needle - how much to save, what you pay, and what to do when markets drop - reach out to me or read more here & at assetlifematching.com.
* Early MTV Rod Stewart, before the Vegas crooner he became. Video in heavy rotation at the time. Can you tell I was a fan?
Sources checked Oct 15, 2026: Tipswatch (Oct 14, 2026) for the 4.08% variable rate and expected fixed-rate range; TreasuryDirect for the current 0.90% fixed rate, 4.26% composite, and rate formula; Fed data via FRED for the 10-year TIPS yield.