If future inflation turns out to be higher than the market’s prediction (2.3% over 10 years) then inflation-adjusted bonds will be better than regular Treasuries.
Treasury Inflation-Protected Securities – 30 Oct 26
Treasury sets I Bond’s fixed rate of 1.40%; composite rate rises to 5.51%

This is a breaking news article. When this message disappears, I will have completed updates. By David Enna, Tipswatch.com The U.S. Treasury followed a decade-long tradition and set the fixed rate ...
Treasury sets I Bond’s fixed rate of 1.40%; composite rate rises to 5.51%

Posted on October 30, 2026 by Tipswatch

Compare I-Bonds with TIPS. These are YTMs, not the coupon rates.
1 year 1.757% - Minimum hold of I-Bond, minus 3 months interest until 5 years
5 year 2.261% - I-Bond hold with no loss of interest.
29 year 3.102% - I-Bonds can be held 30 years. This is a high yield.

TIPS yields are the highest since 2008. I bought I-Bonds in 2001 with a fixed rate of 3% but all I-Bond fixed yields after that were lower.

Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity, Quoted on an Investment Basis, Inflation-Indexed

Other differences:
I-Bond interest is the fixed rate + CPI-U, calculated on face value of the bond.
TIPS interest is the coupon rate calculated on the principal. The principal is increased (or decreased) by CPI-U.

If deflation occurs the I-Bond value will not decline but the TIPS value will.

I-Bond interest may be tax-deferred until maturity. TIPS interest is taxable in the year incurred, including “phantom interest” on the increased value of the principal.

Wendy