Series I Bonds are inflation-protected U.S. savings bonds whose interest rate adjusts with the Consumer Price Index. They combine a fixed rate (set at purchase) with a variable inflation rate (updated every 6 months) for a composite rate that protects your purchasing power. Use this I Bond calculator to find your composite rate, current redemption value, and early withdrawal penalty.
I Bond Details
Max $10,000 electronic / $5,000 paper per year
Set at purchase, never changes (check TreasuryDirect for current rate)
Half the annualized CPI-U change (updated May & Nov)
Annual Purchase Limits
Rate & Value Details
For informational purposes only. Verify current rates at TreasuryDirect.gov. Not financial advice.
How to Use the I Bond Calculator
I Bonds offer a unique combination of inflation protection and government backing, making them one of the most compelling savings vehicles when inflation is elevated. Understanding the composite rate formula and redemption rules is essential to maximizing their benefit. This I Bond calculator handles the math so you can focus on strategy.
Step 1: Enter Your Purchase Details
Enter the amount you purchased or plan to purchase. The annual electronic limit is $10,000 per Social Security number through TreasuryDirect.gov. Select the purchase month — this determines when your 6-month rate periods start and when the 12-month lock-up and 5-year penalty-free periods expire.
Step 2: Enter the Fixed and Inflation Rates
The fixed rate is set at the time of purchase and never changes for the life of your bond. The semiannual inflation rate is the variable component, updated every May and November based on CPI-U changes. Enter the semiannual rate (half of the annualized inflation adjustment — check TreasuryDirect.gov for the current announced rate).
Step 3: Understanding the Composite Rate Formula
The I Bond composite rate is calculated as: Fixed Rate + (2 × Semiannual Inflation Rate) + (Fixed Rate × Semiannual Inflation Rate). This formula ensures both the fixed and inflation components compound together. For example, with a 1.20% fixed rate and 1.90% semiannual inflation rate, the composite rate is approximately 5.02% annualized.
Step 4: Plan Your Redemption Timing
I Bonds can't be redeemed in the first 12 months. If you redeem between 12 and 60 months, you forfeit the last 3 months of interest as a penalty. After 5 years (60 months), there is no penalty. Selecting your planned redemption date shows whether the penalty applies and what your net redemption value will be.
For a detailed walkthrough, see our guide: I Bonds vs High-Yield Savings Account Comparison.
FAQ
Is this I Bond calculator free?
Yes, completely free with no signup required. All calculations run in your browser — your financial data is never sent to any server.
Is my financial data private?
Absolutely. Everything runs entirely in your browser using client-side JavaScript. No data is transmitted or stored anywhere.
How is the I Bond composite rate calculated?
The composite rate combines a fixed rate (set at purchase and never changes) with a variable inflation component based on CPI-U. The formula is: Composite Rate = Fixed Rate + (2 × Semiannual Inflation Rate) + (Fixed Rate × Semiannual Inflation Rate). The composite rate adjusts every six months based on your specific purchase date anniversary, not the Treasury's announcement dates.
What is the early redemption penalty for I Bonds?
If you redeem an I Bond before 5 years, you forfeit the last 3 months of interest. After 5 years, there is no penalty. You must hold an I Bond for at least 12 months before redeeming — you cannot cash it in during the first year under any circumstances.
How much can I buy in I Bonds per year?
The annual purchase limit is $10,000 in electronic I Bonds per Social Security number through TreasuryDirect.gov, plus an additional $5,000 in paper I Bonds using your federal tax refund (IRS Form 8888). Trusts, estates, and certain entities have separate limits.
When does the I Bond composite rate change?
Your I Bond's rate changes every 6 months based on your specific purchase month, not the Treasury announcement dates. If you bought in January, your rate updates in January and July each year. The Treasury announces new inflation components in May and November, which then roll out to bondholders on their individual 6-month anniversaries.
Are I Bond earnings taxable?
I Bond interest is subject to federal income tax but exempt from state and local taxes. You can defer federal taxes until redemption, or you can elect to report interest annually. I Bond earnings used for qualified education expenses may be partially or fully tax-free if your income is below the IRS threshold.