Estimate your I Bond growth, composite rate, and early redemption penalties.
Calculation Results
Composite Earnings Rate (Annual):0.00%
Total Earned Interest:$0.00
Early Redemption Penalty (3-month):$0.00
Current Cash-Out Value:$0.00
Understanding Series I Savings Bond Math
Series I Savings Bonds are unique financial instruments offered by the U.S. Treasury designed to protect your purchasing power from inflation. Unlike traditional bonds, the return on an I Bond is comprised of two distinct parts: a fixed rate of return and a variable semiannual inflation rate.
The Composite Rate Formula
The total interest you earn is called the "Composite Rate." It is not a simple addition of the two rates. The Treasury uses a specific formula to ensure the fixed rate also grows with inflation:
Composite Rate = [Fixed Rate + (2 x Semiannual Inflation Rate) + (Fixed Rate x Semiannual Inflation Rate)]
The Holding Period and Penalties
When using an I Bond calculator, you must account for the time-based restrictions:
0-12 Months: The bond cannot be cashed out (liquidated).
1-5 Years: You can cash out, but you lose the last three months of interest as a penalty.
5+ Years: No penalty applies; you receive the full value of the bond and all accrued interest.
30 Years: The bond reaches final maturity and stops earning interest.
Example Calculation
Imagine you purchase $10,000 in I Bonds with a 1.30% fixed rate and a semiannual inflation rate of 1.90%.
First, calculate the composite rate: 0.013 + (2 x 0.019) + (0.013 x 0.019) = 0.051247 or 5.12%.
Over 12 months, your bond would accrue approximately $512 in interest.
If you cash out at month 13, you would lose roughly $128 (3 months of interest), leaving you with a net gain of $384.
Why Use an I Bond Calculator?
Because I Bond interest is compounded semiannually and the inflation rate changes every May and November, tracking the exact value of your investment manually is difficult. This calculator helps you project future values based on current rates and understand exactly how much the 3-month penalty will impact your bottom line if you decide to exit your position early.
function calculateIBond() {
var principal = parseFloat(document.getElementById('purchasePrice').value);
var fixedRate = parseFloat(document.getElementById('fixedRate').value) / 100;
var semiannualInflation = parseFloat(document.getElementById('inflationRate').value) / 100;
var months = parseInt(document.getElementById('holdingMonths').value);
if (isNaN(principal) || isNaN(fixedRate) || isNaN(semiannualInflation) || isNaN(months)) {
alert("Please enter valid numerical values for all fields.");
return;
}
// Calculate Composite Rate
// Formula: Fixed + (2 * Semi) + (Fixed * Semi)
var compositeRate = fixedRate + (2 * semiannualInflation) + (fixedRate * semiannualInflation);
var annualRate = compositeRate;
// Series I bonds compound semiannually.
// For simplicity in a web calculator, we calculate monthly accrual
var monthlyRate = annualRate / 12;
// Total gross interest
var grossInterest = 0;
var currentVal = principal;
// Compounding every 6 months logic
for (var i = 1; i <= months; i++) {
var interestThisMonth = currentVal * (annualRate / 12);
grossInterest += interestThisMonth;
// In reality, interest is added monthly but compounded every 6 months
if (i % 6 === 0) {
currentVal = principal + grossInterest;
}
}
// Penalty Logic
var penalty = 0;
if (months grossInterest) {
penalty = grossInterest;
}
var netInterest = grossInterest – penalty;
var finalValue = principal + netInterest;
// Update UI
document.getElementById('resComposite').innerText = (annualRate * 100).toFixed(2) + "%";
document.getElementById('resInterest').innerText = "$" + grossInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resPenalty').innerText = months >= 60 ? "$0.00 (No Penalty)" : "$" + penalty.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('resTotal').innerText = "$" + finalValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('ibondResults').style.display = 'block';
}