I-Bond composite rate and value over time
Last reviewed: January 2026
The I-Bond Return Calculator is a free browser-based tool that performs this calculation instantly with no signup or downloads required. Enter your values, click calculate, and get accurate results immediately. All processing happens in your browser — nothing is sent to a server.
Series I Savings Bonds earn a composite rate = fixed rate + (2 × semi-annual inflation rate). The inflation component resets every 6 months (May and November). I-bonds are federally taxable but state/local tax-exempt, and tax can be deferred until redemption. Key rules: must hold 1 year before redemption; redeeming before 5 years forfeits the last 3 months of interest; $10,000/year limit per Social Security number ($5,000 additional via tax refund). I-bonds shine as an emergency fund supplement when inflation is high.
| Issue Period | Fixed Rate | Inflation Rate | Composite Rate |
|---|---|---|---|
| Nov 2022 – Apr 2023 | 0.40% | 3.24% | 6.89% |
| May 2023 – Oct 2023 | 0.90% | 1.69% | 4.30% |
| Nov 2023 – Apr 2024 | 1.30% | 1.97% | 5.27% |
| May 2024 – Oct 2024 | 1.30% | 1.48% | 4.28% |
Series I Savings Bonds are U.S. government securities that protect your purchasing power by adjusting for inflation. Each I Bond's interest rate combines a fixed rate (set at purchase, stays for the bond's life) with a variable inflation rate (adjusted every 6 months based on CPI-U). The composite rate ensures that your investment at minimum keeps pace with inflation — and the fixed rate component adds guaranteed real return on top. I Bonds are purchased directly from TreasuryDirect.gov (electronic, up to $10,000/person/year) or through IRS tax refunds (paper, up to $5,000/year). Total annual purchase limit per Social Security number is $15,000.
| Component | Current (May 2025) | How It Works |
|---|---|---|
| Fixed rate | Set at purchase | Stays constant for 30 years |
| Inflation rate | Adjusts semi-annually | Based on CPI-U changes (Mar–Sep, Sep–Mar) |
| Composite rate | Fixed + (2 × semiannual inflation) | Cannot go below 0% |
I Bonds, TIPS (Treasury Inflation-Protected Securities), and high-yield savings accounts all protect against inflation but differ in important ways. I Bonds cannot lose principal value and have a 0% floor on the composite rate — TIPS can have negative returns if deflation occurs. I Bonds are tax-deferred until redemption and exempt from state/local tax, while TIPS pay taxable interest annually including phantom income from inflation adjustments (TIPS investors owe tax on inflation adjustments they have not yet received in cash). High-yield savings accounts offer immediate liquidity but rates are not guaranteed and typically lag inflation during high-inflation periods. For amounts under $10,000–$15,000, I Bonds offer the best risk-free, inflation-protected return. Compare fixed income options with our CD Calculator.
I Bonds must be held for a minimum of 12 months — no exceptions. If redeemed within the first 5 years, you forfeit the last 3 months of interest as a penalty. After 5 years, there is no penalty and you can redeem at any time. I Bonds earn interest for 30 years if not redeemed earlier. The 3-month penalty is relatively mild and does not affect your principal — it simply reduces your effective return slightly. For emergency fund allocation, purchase I Bonds in stages (e.g., $2,000/quarter) so that at least a portion becomes penalty-free each quarter, creating rolling liquidity.
I Bond interest is exempt from state and local income taxes, which provides an additional edge for residents of high-tax states. Federal tax on accumulated interest is deferred until the bond is redeemed or reaches maturity (30 years) — unlike most bonds that require annual tax payments on accrued interest. If used for qualified higher education expenses (tuition and fees at eligible institutions), the interest may be completely tax-free at the federal level as well, subject to income limits. This education exclusion makes I Bonds an attractive supplement to 529 plans for college savings. Factor I Bond returns into your savings strategy with our Savings Goal Calculator and Compound Interest Calculator.
Beyond emergency fund allocation, I Bonds serve several strategic purposes. They function as an inflation-protected component of a bond portfolio, complementing nominal bonds that lose real value during high inflation. They provide a safe parking place for funds earmarked for a near-term goal (home down payment, car purchase) within the 1–5 year timeframe where stock market volatility is too risky. And they offer retirees a portion of inflation-protected fixed income without the complexity of TIPS funds. The main limitation is the $10,000 annual purchase cap, which restricts their utility for large portfolios. However, couples can each purchase $10,000, and adding $5,000 via tax refund brings the household total to $25,000 annually. Track your overall asset allocation with our Net Worth Calculator.
I Bonds can serve as a secondary emergency fund layer due to their inflation protection and zero risk of loss. After the mandatory 12-month holding period, they become liquid (with the 3-month interest penalty for the first 5 years). A strategy some financial planners recommend: build your primary emergency fund in a high-yield savings account first, then redirect savings into I Bonds up to the annual limit. Over time, the I Bond portion grows into a substantial inflation-protected reserve that outperforms savings accounts during high-inflation periods. After 5 years, this I Bond emergency reserve is fully liquid with no penalties. The main limitation is the annual purchase cap — building a significant I Bond position takes several years of maximum contributions. Supplement your I Bond strategy with our Emergency Fund Calculator.
I Bonds represent one of the few truly risk-free investments available to individual investors. Backed by the full faith and credit of the U.S. government, with inflation protection built into the rate structure and a 0% floor that prevents negative returns, they occupy a unique position in any portfolio. While the $10,000 annual limit constrains their role, maximizing I Bond purchases each year builds a growing, inflation-proof foundation that complements more volatile equity and bond holdings.
See also: Compound Interest Calculator · Inflation Calculator · Savings Goal Calculator
→ The 3-month interest penalty for early redemption changes the math. If you redeem between 1 and 5 years, you forfeit the last 3 months of interest. For short-term holdings, this penalty can reduce your effective return by 25–50%. After 5 years, no penalty applies and you receive all accrued interest.
→ Fixed rate locks in for the life of the bond — inflation rate adjusts semiannually. A bond purchased when the fixed rate is 1.3% keeps that fixed rate for 30 years. The inflation component resets every 6 months based on CPI changes. High fixed-rate periods are the best time to buy — you're locking in a real return above inflation forever.
→ I bonds are limited to $10,000 per person per year electronically. You can buy an additional $5,000 in paper bonds using your tax refund (IRS Form 8888). Married couples filing jointly can buy $10,000 each. Trusts and businesses can each buy $10,000 as well, creating multiple channels. Compare with other safe investments like our CD Ladder Calculator.
→ I bonds never lose nominal value — deflation only reduces the inflation component to zero. If CPI goes negative, the combined rate floors at 0% (not negative). Your principal and previously earned interest are fully protected. This downside protection plus inflation matching makes I bonds one of the safest investments available. Model other bond investments with our Savings Growth Calculator.
See also: CD Ladder Calculator · Savings Growth Calculator · Inflation Calculator · Investment Calculator