Ibond Rate Calculator

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Series I Savings Bond Composite Rate Calculator

The rate set by the Treasury at the time of purchase (remains constant).
The semiannual inflation rate based on changes in the CPI-U.
Calculated Composite Rate (Annualized):
0.00%
function calculateIBondRate() { var fixedInput = document.getElementById('fixedRate').value; var semiInput = document.getElementById('semiannualRate').value; var fixedRate = parseFloat(fixedInput) / 100; var semiannualRate = parseFloat(semiInput) / 100; if (isNaN(fixedRate) || isNaN(semiannualRate)) { alert("Please enter valid numerical values for both rates."); return; } // The Formula: [Fixed rate + (2 x Semiannual inflation rate) + (Fixed rate x Semiannual inflation rate)] var compositeRate = fixedRate + (2 * semiannualRate) + (fixedRate * semiannualRate); // Convert back to percentage and round to 2 decimal places var finalResult = (compositeRate * 100).toFixed(2); // Ensure the rate does not go below zero (I-Bonds have a floor of 0%) if (finalResult < 0) { finalResult = "0.00"; } document.getElementById('finalRateDisplay').innerText = finalResult + "%"; document.getElementById('ibondResult').style.display = "block"; }

How the I-Bond Interest Rate is Calculated

Series I Savings Bonds earn interest based on a combination of two distinct rates: a Fixed Rate and a Semiannual Inflation Rate. These two components are combined into what the U.S. Treasury calls the Composite Rate.

The Composite Rate Formula

While many people think you simply add the two rates together, the actual math is slightly more complex to account for the interaction between the fixed and variable portions. The formula used is:

Composite Rate = [Fixed Rate + (2 x Semiannual Inflation Rate) + (Fixed Rate x Semiannual Inflation Rate)]

Example Calculation

Let's say the Treasury announces a 1.30% fixed rate and a semiannual inflation rate of 1.90%:

  • Fixed Rate: 1.30% (0.013)
  • Semiannual Inflation Rate: 1.90% (0.019)
  • Calculation: 0.013 + (2 x 0.019) + (0.013 x 0.019)
  • 0.013 + 0.038 + 0.000247 = 0.051247
  • Result: 5.12%

Key Features of Series I Bonds

  • Fixed Rate: Set when you buy the bond and never changes for the 30-year life of the bond.
  • Inflation Rate: Adjusted every six months (on May 1 and November 1) based on changes in the Consumer Price Index for all Urban Consumers (CPI-U).
  • Interest Compounding: Interest is added to the bond's value semiannually, meaning you earn interest on your previous interest.
  • Taxation: Interest is subject to Federal income tax but is exempt from State and Local income taxes. You can defer reporting the interest until you cash the bond or it reaches maturity.
  • Redemption Rules: You must hold the bond for at least 12 months. If you cash it in before 5 years, you forfeit the last 3 months of interest.

Why Use an I-Bond Rate Calculator?

Using an I-Bond rate calculator helps investors understand their actual yield. Because the Treasury announces the semiannual inflation rate, simply doubling it doesn't give you the exact annualized composite rate if there is a non-zero fixed rate. This tool ensures you have the precise figure for your financial planning and inflation-hedging strategies.

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