Series I Savings Bond Composite Rate Calculator
Calculation Results
Composite Rate (Annual):
0.00%
Total Interest Earned:
$0.00
Value After 5-Year Penalty Check:
$0.00
Total Bond Value:
$0.00
Understanding I Bonds Rates and Calculations
Series I Savings Bonds are a low-risk investment product offered by the U.S. Treasury that protect your purchasing power from inflation. The interest rate for an I Bond is a "Composite Rate," which is derived from two distinct components: a fixed rate of return and a semiannual inflation rate.
The Composite Rate Formula
The Treasury uses a specific formula to determine the earnings on your bond. It is not a simple addition of the two rates. The formula is:
Composite Rate = [Fixed Rate + (2 x Semiannual Inflation Rate) + (Fixed Rate x Semiannual Inflation Rate)]
Key Factors in I Bond Returns
- Fixed Rate: This rate is set when you purchase the bond and remains the same for the 30-year life of the bond.
- Inflation Rate: This rate is adjusted every six months (in May and November) based on changes in the Consumer Price Index for all Urban Consumers (CPI-U).
- The 5-Year Rule: If you cash in an I Bond before five years, you lose the previous three months of interest as a penalty.
- Taxation: Interest is subject to federal income tax but exempt from state and local income taxes.
Historical I Bond Rate Chart (Recent Trends)
| Issue Dates | Fixed Rate | Inflation Rate | Composite Rate |
|---|---|---|---|
| Nov 2023 — Apr 2024 | 1.30% | 1.97% | 5.27% |
| May 2023 — Oct 2023 | 0.90% | 1.69% | 4.30% |
| Nov 2022 — Apr 2023 | 0.40% | 3.24% | 6.89% |
| May 2022 — Oct 2022 | 0.00% | 4.81% | 9.62% |
Example Calculation
If you invest $5,000 in a bond with a 1.30% fixed rate and the semiannual inflation rate is 1.48%:
- Fixed Rate: 0.013
- Inflation Rate: 0.0148
- Formula: 0.013 + (2 x 0.0148) + (0.013 x 0.0148)
- Result: 0.013 + 0.0296 + 0.0001924 = 0.0427924 or 4.28%