📈 I Bond Calculator

Estimate the composite rate, accrued value, and early-redemption penalty for a Series I U.S. savings bond, using the current fixed rate and semiannual inflation rate as a starting point.

Net Redemption Value

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Composite Rate — Gross Value — Early-Redemption Penalty — Net Value — Total Interest —

Semiannual Accrual Schedule

Period	Rate Applied	Interest	Running Value

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What Is a Series I Savings Bond?

A Series I savings bond is a U.S. Treasury savings bond designed to protect your purchasing power from inflation. Its interest rate, called the composite rate, combines a fixed rate that stays the same for the life of the bond (30 years) with an inflation rate that resets every six months based on changes in the non-seasonally-adjusted Consumer Price Index for All Urban Consumers (CPI-U). The Treasury announces new rates every May 1 and November 1. Individuals can buy up to $10,000 per calendar year electronically through TreasuryDirect.gov. Purchases of paper I bonds through an IRS tax refund ended January 1, 2025. Existing paper I bonds can still be held or redeemed.

How the Composite Rate Formula Works

The composite rate is calculated using a formula set by the Treasury: Composite Rate = Fixed Rate + (2 x Semiannual Inflation Rate) + (Fixed Rate x Semiannual Inflation Rate), with all rates expressed as decimals in the calculation and the result displayed as a percentage. For example, a fixed rate of 1.2% (0.012) and a semiannual inflation rate of 1.5% (0.015) produce a composite rate of 0.012 + (2 x 0.015) + (0.012 x 0.015) = 0.012 + 0.03 + 0.00018 = 0.04218, or 4.218%. This formula ensures that even if inflation were zero, you still earn at least the fixed rate, and the cross-term (fixed x semiannual) is a small compounding adjustment specified in Treasury regulations. If the calculated composite rate would be negative, it is floored at 0% you can never lose principal value on an I bond.

Current I Bond Rates for May 2026 - October 2026

For I bonds issued between May 2026 and October 2026, the U.S. Treasury has set the fixed rate at 0.90% and the semiannual (6-month) inflation rate at 1.67%, which annualizes to approximately 3.34%. Applying the composite rate formula gives approximately 4.26% (0.009 + 2x0.0167 + 0.009x0.0167 = 0.04255, which the Treasury rounds to 4.26% in its official publication). This rate applies to the first six months after purchase for any bond bought in this window; after that, the bond's combined rate resets every six months, using the bond's own fixed rate (which never changes) combined with the newly announced semiannual inflation rate. Source: TreasuryDirect.gov, verified for the May-October 2026 rate-setting period. These figures are prefilled as defaults above but can be edited to model any historical or projected rate combination.

How Interest Compounds: Semiannual Compounding Explained

I bond interest is earned monthly and compounds semiannually, meaning every six months the accrued interest for that period is added to the bond's principal, and the next six-month period earns interest on this new, larger balance. This calculator applies the user-entered composite annual rate divided by two for each completed six-month period, compounding the running value at each step, and uses a fractional exponent for any partial period shorter than six months. Although the Treasury updates the composite rate every six months from your bond's issue date, this calculator holds one input rate constant for the full holding period you enter. It is therefore a simplified constant-rate projection, including for periods of six months or less, rather than a reproduction of official TreasuryDirect values or redemption amounts; in particular, it does not use issue-specific rate history or Treasury valuation tables, and TreasuryDirect values for bonds redeemed before five years exclude the final three months of interest. For longer projections, it also assumes that future inflation and the resulting composite rate remain unchanged.

The 12-Month Lockup and 5-Year Early-Redemption Penalty

I bonds cannot be redeemed at all during the first 12 months after purchase this is a hard lockup with no exceptions, even in cases of financial hardship (the one exception is bonds owned by residents of a federally declared disaster area, under specific Treasury rules). After the 12-month mark, bonds can be redeemed, but if you cash one out before it is 5 years old, you forfeit the most recent 3 months of interest as a penalty. For example, redeeming a bond after exactly 12 months means you actually only keep 9 months worth of accrued interest the last 3 months are clawed back. This calculator automatically computes this penalty for any holding period under 60 months, and shows a warning if you enter a holding period under 12 months, since redemption would not be permitted at all in that window.

I Bonds vs T-Bills vs CDs: Which Should You Choose?

I bonds, Treasury bills (see our T-Bill Calculator), and CDs (see our CD Ladder Calculator) all serve different roles in a conservative cash strategy. I bonds are unique in offering inflation protection built directly into the rate, making them attractive when inflation is elevated or uncertain, but they come with the $10,000/year purchase limit, the 12-month lockup, and the early-withdrawal penalty of losing the final 3 months of interest inside 5 years. T-bills offer more flexibility ($100 minimum, in $100 increments, tradable before maturity, with terms as short as 4 weeks) and state-tax-exempt interest, but they have no inflation adjustment; their rates are fixed at purchase. CDs may offer competitive fixed rates and, at insured banks, are FDIC-insured up to applicable coverage limits, but they typically carry stricter early-withdrawal penalties and offer no inflation protection. Many savers use all three together: I bonds for long-term inflation-protected savings, and T-bills or CD ladders for shorter, more flexible needs.

Taxes on I Bond Interest

I bond interest is subject to federal income tax but exempt from state and local income taxes, similar to T-bills. Interest can be reported annually as it accrues or, more commonly, deferred and reported all at once in the year the bond is cashed or matures (after 30 years), whichever comes first. Some taxpayers can exclude I bond interest from federal tax entirely if proceeds are used to pay for qualified higher education expenses, subject to income phase-out limits and other IRS rules under the Education Savings Bond Program. As always, this calculator provides estimates for planning purposes only consult a tax professional for guidance specific to your situation, and refer to TreasuryDirect.gov for the official, currently published rates before making a purchase decision.

Frequently asked questions

What is the current I bond composite rate?

For I bonds issued May 2026 through October 2026, the composite rate is approximately 4.26%, combining a 0.90% fixed rate with a 1.67% semiannual inflation rate, per TreasuryDirect.gov. This calculator uses these figures as editable defaults.

How is the I bond composite rate calculated?

Composite Rate = Fixed Rate + (2 x Semiannual Inflation Rate) + (Fixed Rate x Semiannual Inflation Rate), using decimal rates in the formula. For example, a 1.2% fixed rate and 1.5% semiannual inflation rate produce a 4.218% composite rate.

Can I cash out my I bond anytime?

No. I bonds cannot be redeemed during the first 12 months after purchase under any circumstances. Between 12 months and 5 years, you can redeem, but you forfeit the most recent 3 months of interest as a penalty.

How often does I bond interest compound?

I bond interest compounds semiannually (every 6 months), with accrued interest added to the principal so that subsequent periods earn interest on the new, larger balance.

Is I bond interest taxable?

I bond interest is subject to federal income tax but exempt from state and local income taxes. Tax can typically be deferred until the bond is cashed or matures, and some education-expense uses may qualify for a federal tax exclusion.

Is this tool financial advice?

No. This calculator is for educational and estimation purposes only and does not constitute financial, investment, or tax advice. Actual composite rates change every six months consult TreasuryDirect.gov or a licensed financial advisor before making decisions.