Suze Orman Says the New I Bond Fixed Rate Is ‘Pretty Great.’ Should You Buy?
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On her Women & Money podcast, Suze Orman told listeners: “So listen closely right now as I speak, on November 8, okay, the rate as of November 1, 2026, the fixed rate is 1.40%. And for a Series I bond, that’s a pretty great fixed rate. There are many I bonds that were issued in the past that have a 0% fixed rate.”
The stakes come from how long that number lasts. Any bond you buy now carries its fixed rate for its full 30-year life. Buy without a plan, and you can lock up cash you can’t touch for a full year.
Orman Is Right About the Fixed Rate, and Here Is the Math
Her assessment holds up. The fixed rate is the most valuable part of an I bond because it’s the only part you keep. Treasury says the fixed rate never changes, while the inflation rate is reset every 6 months.
Bonds issued from Nov. 1, 2026 through Apr. 30, 2027 earn a composite rate of 5.5%. That figure combines the 1.40% fixed rate Orman cited with a semiannual inflation rate of 2%. The inflation piece will move. Orman’s 1.40% won’t.
Now compare that to an older bond with the 0% fixed rate Orman mentioned. It gets the same inflation adjustment, but its composite rate this period works out to about 4.1%. On $10,000, the new bond’s fixed rate adds roughly $140 a year in real return.
That gap compounds. Over 10 years, Orman’s 1.40% rate adds roughly $1,492 of real purchasing power to the same purchase. If inflation disappears, the 0% bonds Orman highlighted earn nothing while the new one keeps its fixed rate.
Bank CDs pay less. The national average 12-month CD yields 1.8%, or about $176 on $10,000. Some online banks pay more than that average, but none guarantee a return above inflation for decades.
Taxes help, too. Treasury notes that I bond interest is subject to federal income tax but exempt from state and local income tax. The IRS lets you postpone reporting the interest until you cash the bond.
Your Time Horizon Decides Whether This Works
The rules come with friction. Each Social Security number can buy $10,000 in electronic I bonds a year, and gift bonds count toward the recipient’s limit. You can cash in an I bond after 12 months, but early sellers lose the last 3 months of interest.
Take a $10,000 purchase. If you need the money in month eight, you can’t cash it out. Cashing out at month 18 costs roughly $138 in lost interest under the current composite rate. That wipes out about a year of the fixed-rate advantage.
Hold past five years, and the penalty disappears. Then Orman’s 1.40% keeps compounding for as long as you leave the money alone. The buy pays off for money with a long runway. For cash you might need soon, it’s a poor fit.
Orman on Cashing In Old 0% Bonds
Orman framed the question around purpose: “And the whole purpose of an I bond is to help protect your savings from inflation. And given where inflation is right now, maybe it’s not a bad idea.”
Her advice in earlier episodes follows that logic. In Orman’s view, a swap makes sense only for bonds with a 0% fixed rate, and only if you want long-term inflation protection. She has told holders of bonds with higher fixed rates to keep them.
An old 0% bond Orman highlighted carries no penalty once held past five years. Cashing it in means paying federal tax on all the deferred interest that year. The new bond also restarts the 12-month lockup, and the annual cap limits how much you can roll over.
Steps to Take Before Buying
- Check each bond’s fixed rate. Log in to TreasuryDirect and match each bond’s issue date to Treasury’s rate chart. Per Orman, only bonds with a 0% fixed rate are candidates to swap.
- Check the holding period. You can’t cash in a bond under 12 months old. One under five years old costs three months of interest.
- Estimate the tax bill. Take the bond’s current value minus what you paid. That deferred interest becomes federal taxable income in the year you cash in.
- Size the purchase to your timeline. I bond cash is locked for 12 months and carries a three-month interest penalty before five years, which matters for emergency funds.
- Compare after-tax yields. Line up the I bond’s state tax exemption against the best CD or Treasury yield you can find. Do the math on your own tax bracket.
Treasury resets the inflation rate every 6 months, while the 1.40% fixed rate Orman recommended stays the same for any bond bought in this window for its full 30-year life.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
