Savings & Banking
I Bond Calculator
A Series I savings bond pays a fixed rate locked for the life of the bond plus an inflation rate that resets every six months. The Treasury combines them into a composite rate. Redeem before five years and you forfeit the last three months of interest.
Tested against worked examplesHow we verify
The annual electronic purchase limit is $10,000 per person.
Set at purchase and fixed for 30 years.
The six-month inflation figure the Treasury announces each May and November.
Minimum hold is 12 months. No penalty after 60.
Composite rate: 5.27%
Composite rate
5.27%
Fixed rate + twice the semiannual inflation rate + their product.
The inflation portion resets every six months, so the composite rate shown applies only to the current period — future value depends on inflation rates not yet announced. This uses today's rate throughout, which is a projection, not a promise.
- Value after this period
- $10,392
- Before any penalty
- $10,527
- Interest earned
- $527
- Early-redemption penalty
- $134
The last three months of interest, forfeited before five years.
Compare scenariosTry three values of one input
| Amount invested | |||
|---|---|---|---|
| Composite rate | 5.27% | 5.27% | 5.27% |
| Value after this period | $9,353 | $10,392+$1,039 | $10,392+$1,039 |
| Before any penalty | $9,474 | $10,527+$1,053 | $10,527+$1,053 |
| Interest earned | $474 | $527+$53 | $527+$53 |
| Early-redemption penalty | $121 | $134+$13 | $134+$13 |
Every other input stays at the value you set above — currently $10,000 for amount invested. Differences are measured against the first column.
Saved scenariosSave this calculation
Saved in this browser only — no account, and nothing is sent to us. Clearing your browser data deletes them.
How this calculator works
The composite rate uses the official Treasury formula. Value grows at that rate over the months held, and the early-redemption penalty is the interest earned in the final three months — computed as the value now minus the value three months earlier — applied whenever the bond is held under five years.
A single composite rate is applied for the whole holding period. In reality the inflation component resets every six months, so a multi-year projection depends on future rates that have not been set. Treat any figure beyond the current six-month period as illustrative, and check TreasuryDirect for the current rates.
What this assumes
- The composite rate combines a fixed rate held for the life of the bond and an inflation rate that resets twice a year.
- Redeeming before five years forfeits the last three months of interest; redemption is not permitted at all in the first year.
- Annual purchase limits apply per person, and are not enforced by this calculator.
What changes this number
- The inflation component
- Resets semi-annually, so the headline rate at purchase is not the rate you keep.
- The fixed rate
- Held for the life of the bond, which makes the purchase date matter more than it first appears.
- Holding period
- The three-month interest penalty before five years is the main cost of treating these as short-term savings.
A worked example
Take the $10,000 held one year scenario. These figures are produced by the calculator above, not written alongside it, so they always match what the tool returns.
What you enter
- Amount invested
- $10,000
- Fixed rate
- 1.3%
- Semiannual inflation rate
- 1.97%
- Months held
- 12 months
What it returns
- Composite rate
- 5.27%
- Value after this period
- $10,392
- Before any penalty
- $10,527
- Interest earned
- $527
- Early-redemption penalty
- $134
The inflation portion resets every six months, so the composite rate shown applies only to the current period — future value depends on inflation rates not yet announced. This uses today's rate throughout, which is a projection, not a promise.
Try an example
Frequently asked questions
How is the I bond rate calculated?
The composite rate is the fixed rate plus twice the semiannual inflation rate plus the product of the two: fixed + (2 × semi) + (fixed × semi). With a 1.30% fixed rate and 1.97% semiannual inflation, that is about 5.27%. The fixed part stays for the life of the bond; the inflation part resets every six months.
When can I cash out an I bond?
Not in the first 12 months — the money is fully locked. From month 13 to month 59 you can redeem but forfeit the previous three months of interest. From five years on there is no penalty at all. The bond stops earning after 30 years.
How much can I buy?
Up to $10,000 per person per calendar year in electronic bonds through TreasuryDirect, plus up to $5,000 in paper bonds using a federal tax refund. A married couple can therefore buy $20,000 electronically, and more through trusts or businesses.
How are I bonds taxed?
Interest is exempt from state and local tax entirely. Federal tax applies but can be deferred until you redeem the bond or it matures — up to 30 years of deferral. Used for qualified higher-education expenses, the interest may be federally tax-free too, subject to income limits.
Are I bonds a good investment?
They are savings, not an investment — a place to protect cash from inflation with no credit or market risk, backed by the US government. The 12-month lockup makes them unsuitable for an emergency fund's front line, but excellent for money you will not need for a year or more.
Related calculators
CD Calculator
Calculate a certificate of deposit's value at maturity, the interest earned, and the true APY from any rate and compounding frequency.
Tax-Equivalent Yield Calculator
Compare a tax-free municipal bond to a taxable one. See the pre-tax yield a taxable investment must beat to match a tax-free yield at your tax bracket.
Bond Yield Calculator
Calculate a bond's current yield and approximate yield to maturity from its face value, market price, coupon rate, and years remaining.
Savings Calculator
Watch your savings account grow: enter your balance, monthly deposit, and APY to see the future value and every dollar of interest along the way.
Disclaimer: DayCents provides this calculator for educational purposes only. Results are estimates based on your inputs and the stated assumptions — they are not financial advice, a quote, or an offer of credit. Consult a qualified financial professional before making major money decisions.