I Bonds vs CDs
Compare I Bonds and CDs — inflation-linked Treasury savings vs. fixed-rate bank deposits.
Overview
I Bonds are inflation-linked US savings bonds with a rate that adjusts every 6 months. CDs lock in a fixed rate with a bank for a set term. I Bonds win in inflationary periods and are state-tax exempt; CDs win for predictable known cash needs and bigger amounts.
Choose I Bonds when...
Buy up to $10,000/year in I Bonds for inflation-protected long-term savings — especially valuable in high-inflation periods.
Choose CDs when...
Use CDs for larger amounts, shorter known-date goals, or whenever rates are high and you want to lock them in.
Our Verdict
I Bonds are excellent for the first $10,000/year in conservative long-term savings — inflation protection, state tax exemption, and tax-deferred growth. CDs are better for larger sums and specific cash needs at known dates. Many savers max I Bonds annually and use CDs for bigger goals or short-term locks.
Frequently Asked Questions
What is the difference between I Bonds and CDs?
I Bonds are inflation-linked US savings bonds with a rate that adjusts every 6 months. CDs lock in a fixed rate with a bank for a set term. I Bonds win in inflationary periods and are state-tax exempt; CDs win for predictable known cash needs and bigger amounts.
When should I choose I Bonds over CDs?
Buy up to $10,000/year in I Bonds for inflation-protected long-term savings — especially valuable in high-inflation periods.
When should I choose CDs over I Bonds?
Use CDs for larger amounts, shorter known-date goals, or whenever rates are high and you want to lock them in.
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