Series I Bond Calculator
Series I savings bonds are US Treasury securities that pay a composite interest rate combining a fixed rate (set at each May and November offering) and an inflation adjustment rate updated every six months based on changes in the Consumer Price Index for All Urban Consumers (CPI-U). The inflation component resets every six months from the bond's issue month, so two I Bonds purchased in different months will have their rates adjusted at different times even if both are currently earning the same composite rate. Interest accrues monthly and compounds semiannually, meaning earned interest is added to the principal every six months and then itself earns interest going forward. I Bonds cannot be redeemed for the first 12 months after purchase. If redeemed between 12 and 60 months (one to five years), you forfeit the last three months of interest as an early redemption penalty. After five years, there is no redemption penalty. Interest is subject to federal income tax but exempt from state and local tax; you can defer federal tax until redemption or annual maturity, or report it annually. Annual purchase limits are $10,000 per Social Security number via TreasuryDirect, plus up to $5,000 in paper bonds purchased with a federal tax refund. This calculator shows the projected composite rate, accrued balance over time, and the redemption value at any point including the early-redemption penalty if applicable.
An I Bond purchase of $10,000 with a fixed rate of 1.30% and semiannual inflation of 1.23%, held for 5 years, will grow to --.
How I Bond interest is calculated
I Bonds earn interest based on a composite rate that combines a fixed rate (locked for 30 years) and an inflation component. The inflation component is reset twice per year based on changes in the Consumer Price Index for All Urban Consumers (CPI-U). Interest is compounded semiannually, meaning interest is calculated and added to your balance every 6 months.
Composite annual rate = fixed rate + 2 * semiannual CPI change
Each 6-month period: balance = balance * (1 + composite rate / 2)
If held less than 5 years: subtract 3 months of interest as penalty
Key features of Series I Bonds
Series I Bonds are unique savings instruments that protect your purchasing power against inflation while offering a government-backed guarantee. Because the interest rate adjusts twice per year to match inflation, you know your real (inflation-adjusted) return will never be negative. This makes I Bonds ideal for longer-term savings where you want to preserve purchasing power.
I Bonds are purchased at face value (no premium or discount), and they never mature before 30 years, though you can redeem them after just 12 months. The downside is the penalty for redemption within 5 years, which makes I Bonds more suitable for money you won't need urgently. For comparison, high-yield savings accounts offer immediate access but no inflation protection.
The annual purchase limit of $10,000 per person means that I Bonds work best as part of a diversified savings strategy. You can use TreasuryDirect.gov to manage all your Treasury holdings in one place.
I Bond calculator: frequently asked questions
What is the difference between a fixed rate and composite rate on I Bonds?
The fixed rate is set when you purchase the I Bond and remains the same for the entire 30-year life of the bond. The composite rate is reset every May and November and consists of the fixed rate plus an inflation component based on the Consumer Price Index. The composite rate is what determines your actual return each semiannual period. TreasuryDirect.gov publishes current rates at each reset date.
Can I withdraw my I Bond money whenever I want?
No. I Bonds have withdrawal restrictions. You must hold an I Bond for at least 12 months before you can redeem it. If you redeem before 5 years, you forfeit the last 3 months of interest earned as a penalty. After 5 years, there is no penalty. All I Bonds stop earning interest after 30 years. These rules protect the bond program's integrity and encourage long-term savings.
How much can I buy in I Bonds per year?
The annual purchase limit is $10,000 per person per calendar year when purchased electronically through TreasuryDirect.gov. If you have a tax refund, you can purchase up to an additional $5,000 in paper I Bonds, bringing your total to $15,000 per year. These limits reset on January 1st each year and are enforced per person, not per account.
Are I Bonds subject to federal and state taxes?
I Bond interest is subject to federal income tax but is exempt from state and local income taxes. You can choose to report the interest annually or defer taxes until you redeem the bond or it reaches final maturity. There is also an education exclusion under IRC Section 135 that may allow you to exclude interest from federal taxation if used for qualified education expenses. Consult a tax professional for your specific situation.
How does the I Bond compare to a high-yield savings account?
I Bonds offer inflation protection and potentially higher long-term returns but require you to keep the money locked away for at least a year with a penalty for early withdrawal within 5 years. High-yield savings accounts are liquid, FDIC-insured, and accessible anytime but offer no inflation protection. For emergency funds, choose a high-yield savings account. For longer-term inflation-protected savings, I Bonds are more attractive. The calculator lets you compare the two.
What happens if inflation drops below the fixed rate on my I Bond?
The composite rate of an I Bond is capped at the fixed rate plus the inflation component. If inflation turns negative in a given semiannual period, the composite rate will not fall below the fixed rate. This downside protection means your return never drops below the fixed rate you locked in at purchase, even if inflation becomes negative.
Official sources
- TreasuryDirect I Bonds: Series I Bond Overview.
- I Bond rates and history: I Bond Interest Rates.
- IRC Section 135: Education Exclusion for Savings Bonds.
Reviewed by the CalculatorHub team, edited by James Graham, 13 June 2026. See our methodology. General information, not financial advice.