I-Bond Calculator

What This Means For You

I-Bond Calculator: Calculate Your Series I Savings Bond Returns

An I-Bond calculator projects the value and interest earned on Series I Savings Bonds — US Treasury securities designed to protect your purchasing power from inflation. I-Bonds earn a composite rate combining a fixed rate (set at purchase, lasts 30 years) and an inflation rate (adjusts every 6 months based on CPI-U).

Enter your purchase amount, purchase date, and current fixed rate above to see your I-Bond's projected value, accrued interest, and comparison to HYSA and other safe investments.

How I-Bond Interest Is Calculated

The I-Bond composite rate formula: Composite = Fixed Rate + (2 × Semiannual Inflation Rate) + (Fixed Rate × Semiannual Inflation Rate)

In practice, the last term is negligible, so: Composite ≈ Fixed Rate + (2 × Inflation Rate)

Current I-Bond rates (as of latest announcement):

Example: $10,000 I-Bond purchased at 4.28% composite. After 1 year: $10,000 × 1.0428 = $10,428. Interest earned: $428. The rate adjusts every 6 months — if inflation rises, your rate rises automatically. If inflation falls to zero, you still earn the fixed rate (1.20%). I-Bond rates can never go negative — the floor is 0.00%.

Key advantage: The fixed rate is locked for 30 years. An I-Bond purchased in 2023 with a 0.90% fixed rate earns 0.90% + inflation for life. One purchased during the 2020-2021 period with a 0.00% fixed rate earns only inflation. The fixed rate is the permanent bonus — buy when fixed rates are high.

I-Bond Rules and Limitations

Purchase limits: $10,000/person/year electronically (TreasuryDirect.gov) + $5,000 in paper bonds using your tax refund (Form 8888). A married couple can purchase $30,000/year ($10K each electronic + $5K each paper). Trusts, businesses, and LLCs can each purchase an additional $10,000.

Holding period: Minimum 1 year (cannot redeem before 12 months). If redeemed before 5 years: you forfeit the last 3 months of interest. After 5 years: no penalty. Maturity: 30 years (earns interest the entire time).

Tax advantages: Interest is exempt from state and local taxes (like all Treasury securities). Federal tax is deferred until redemption (no annual tax on accrued interest). If used for qualified higher education expenses: interest may be completely tax-free federally (income limits apply — MAGI under $106,050 single / $166,800 MFJ for 2026 full exclusion).

I-Bonds vs TIPS: Both protect against inflation, but differently. I-Bonds: no market risk (redeemed at face value + interest), $10K annual limit, not tradable. TIPS: traded on the secondary market (price fluctuates with interest rates), no purchase limit, more liquid. For small amounts ($10K-$15K/year): I-Bonds are simpler and risk-free. For larger inflation protection allocations: TIPS in a brokerage account.

When I-Bonds Make Sense in Your Portfolio

Emergency fund complement: After the 1-year lockup, I-Bonds serve as a secondary emergency fund that earns inflation-adjusted returns. Keep 3 months of expenses in a HYSA (instant access) and 3 months in I-Bonds (5+ day redemption). The I-Bond portion earns a guaranteed real return above inflation — something no savings account promises long-term.

College savings alternative: The education tax exclusion makes I-Bonds attractive for college savings — interest is 100% tax-free if used for tuition/fees and your income qualifies. Unlike 529 plans, I-Bonds have no state tax benefit but offer more flexibility (no penalty if funds are not used for education — you just pay tax on the interest).

Conservative portfolio allocation: For retirees or conservative investors, I-Bonds replace the "safe money" portion of a portfolio with inflation-guaranteed returns. $10,000/year for 10 years builds a $100,000+ inflation-protected ladder, with one "rung" maturing past the 5-year penalty-free threshold each year.

Frequently Asked Questions