I Bond Calculator
The bond, its two rates, and how long you will keep it
Your result will appear here
Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- General mathematical model
- Scope and limitations
- Educational estimate only. Confirm the assumptions, current rules, fees, and rounding that apply to your situation before making a decision.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter what you paid, or plan to pay, for the bond. Electronic I bonds are sold only on TreasuryDirect, from $25 up to $10,000 per Social Security number per calendar year.
- 02
Enter how many months you expect to hold it before cashing it. The bond cannot be cashed in its first 12 months and stops earning interest at 30 years, or 360 months.
- 03
Check the fixed rate and the six-month inflation rate. They are filled in for bonds issued 1 May to 31 October 2026, 0.90% and 1.67%; for an older bond, type the rates it carries.
- 04
Enter the annual inflation you expect after the first six months, and under advanced options your federal and state income tax rates.
- 05
Read what the bond pays on the month you cash it, the 3-month penalty if that is before five years, the tax, and the six-month table showing each period's rate.
Formula
Composite rate = fixed rate + 2 × six-month inflation rate + fixed rate × six-month inflation rate, rounded to two decimal places of a percent and never below zero. The first six months use the current six-month inflation rate; each later period uses (1 + your annual inflation assumption)^0.5 − 1, rounded the same way. Within a six-month period the value is value at the start × (1 + composite rate ÷ 2)^(months into the period ÷ 6), and at the end of each period that value becomes the new starting value. If you cash the bond before 60 months you receive its value three months earlier; the difference is the penalty. Interest = amount received − purchase price. Federal tax = interest × federal rate. State tax avoided = interest × state rate.
Example
A $10,000 I bond is bought in the May to October 2026 window and cashed after 36 months. Its fixed rate is 0.90% and its first six-month inflation rate 1.67%, a composite rate of 4.26%, so it is worth $10,213.00 after six months. Assuming 3.4% annual inflation after that, a six-month inflation rate of 1.69%, the composite rate is 4.30% for each later period, and the bond is worth $11,359.13 at month 36. Because that is before five years, the last three months of interest, $120.18, are forfeited, and the bond pays $11,238.96: $1,238.96 of interest, or 3.97% a year. Federal tax at 22% is $272.57, leaving $10,966.39, and no state tax is owed, which saves $61.95 at a 5% state rate. After inflation the bond earned 0.55% a year. Held to month 60 instead, it would pay $12,367.98 with no penalty.
Definitions
- Fixed rate
- The part of an I bond's rate set when the bond is issued. It never changes for the bond's 30-year life; bonds issued 1 May to 31 October 2026 carry 0.90%.
- Six-month inflation rate
- The part of an I bond's rate that follows non-seasonally adjusted CPI-U over six months. Treasury announces it every May and November, and each bond picks it up every six months from its issue month.
- Composite rate
- The single annual rate an I bond earns for six months: fixed rate + 2 × six-month inflation rate + fixed rate × six-month inflation rate, never below zero. Also called the combined or earnings rate.
- Early redemption penalty
- The last three months of interest, lost when an I bond is cashed after 12 months but before five years. A bond cannot be cashed at all in its first 12 months.
- TreasuryDirect
- The Treasury's website and the only place to buy and cash electronic US savings bonds.
Good to know
How an I bond's two rates become one
A Series I savings bond pays a single annual rate made from two parts. The fixed rate is set when you buy the bond and never changes for its 30-year life. The inflation rate follows the change in the non-seasonally adjusted Consumer Price Index for All Urban Consumers over six months, and it resets every six months. Treasury announces both every 1 May and 1 November. For bonds issued from 1 May to 31 October 2026, the fixed rate is 0.90% and the six-month inflation rate is 1.67%, which matches CPI-U's rise from 324.800 in September 2025 to 330.213 in March 2026. TreasuryDirect combines them with a formula: fixed rate, plus twice the six-month inflation rate, plus the fixed rate times the six-month inflation rate. That is 0.0090 plus 0.0334 plus 0.0001503, or 0.0425503, which Treasury rounds to 4.26%. Doubling the six-month inflation rate turns it into an annual figure, and the small cross term lets the fixed rate earn on the inflation adjustment too. If deflation pulls the inflation rate negative, the combined rate can fall below the fixed rate, but Treasury stops it at zero, so the bond's value never falls. Your bond does not switch rates on the announcement date. It changes every six months counted from its issue month: a bond bought in September 2026 earns 4.26% through February 2027 and picks up the rate announced in November from 1 March. Interest is earned monthly and added to the bond's principal twice a year, so each period earns on a larger balance. Because the next inflation rate is not yet known, this page asks for your own inflation assumption after the first six months. At 3.4% a year, a six-month rate of 1.69%, the example bond earns 4.30% in every later period.
The 12-month lock and the 3-month interest penalty
An I bond is not a savings account. For the first 12 months after purchase it cannot be cashed at all, whatever happens. Between 12 months and five years it can be cashed, but you lose the last three months of interest; TreasuryDirect's own example is that a bond cashed after 18 months pays 15 months of interest. After five years there is no penalty, and the bond keeps earning until you cash it or it reaches 30 years. The penalty is the interest the bond actually earned in its most recent three months, so it grows as the bond's value grows. On this page's example, a $10,000 bond cashed at month 36 is worth $11,359.13, but only its value at month 33 is paid, $11,238.96, so the penalty is $120.18. The values TreasuryDirect shows for bonds under five years old already leave out those last three months, so the figure in your account is what you would receive. The penalty shapes the decision in two ways. Money you might need within a year should not go into an I bond, because it is locked. And for money you will need in two to four years, the penalty is a real cost to set against the bond's rate; the I Bonds vs High-Yield Savings Calculator weighs it against an account you can reach at any time. Near the five-year mark the arithmetic changes. Waiting from month 36 to month 60 on the example's assumptions turns $11,238.96 into $12,367.98, and at month 59 the penalty would still cost $130.39. If you are a few months from the fifth anniversary and do not need the money, waiting removes the penalty entirely. Because the lock and the penalty run from each bond's own issue month, bonds bought in different months become free of them at different times, which leaves a later need more than one bond to draw on.
Taxes on I bonds: federal later, state and local never
I bond interest is subject to federal income tax but exempt from state and local income tax. According to TreasuryDirect it remains subject to federal estate, gift and excise taxes and to state estate or inheritance taxes. The timing of the federal tax is flexible. Under IRS Publication 550, an owner using the cash method, which is how most individuals report, can either report the bond's increase in value as interest each year or report all of it in the year the bond is cashed, disposed of or reaches final maturity, whichever comes first. This page assumes you wait. Waiting has two benefits. The interest compounds without a yearly tax bill, and you choose the year the income lands, which can be a year your tax rate is lower. The trade-off is that years of interest can arrive in a single tax year. Once you choose to report every year, Publication 550 applies that choice to all your EE and I bonds, including ones you get later, unless you request permission to change. On this page's example, the $1,238.96 of interest on a bond cashed at 36 months owes $272.57 at a 22% federal rate. No state tax is owed, which saves $61.95 compared with the same interest from a bank account in a state with a 5% income tax. The saving is larger in a high-tax state and zero in a state with no income tax, which is why the state rate is a field. There is also an education exclusion. Interest from I bonds cashed to pay qualified higher education expenses can be excluded from federal income, claimed on Form 8815. For 2026 the exclusion begins to phase out above $101,800 of modified adjusted gross income, or $152,650 on a joint return, and is gone at $116,800, or $182,650 joint, under Rev. Proc. 2025-32. The bond must be registered in an adult's name, not the child's.
When an I bond fits, and what it cannot do
An I bond is at its best as safe money you will not need for at least a year, and ideally five, that you want protected from inflation. Its return above inflation is roughly its fixed rate: on this page's assumptions, a bond held 60 months earns a real return of 0.91% a year against its 0.90% fixed rate, while one cashed at 36 months earns 0.55% because of the penalty. It cannot lose value, it pays no state tax, and its federal tax can wait. Its limits are just as plain. One Social Security number can buy only $10,000 of electronic I bonds each calendar year, only through TreasuryDirect, in amounts from $25. Bonds bought for a child or as gifts come on top of that, and each spouse has a separate limit, but it is still a small allocation for a large cash balance. The bond cannot be sold to anyone else, only cashed with Treasury, and not at all in its first year. The fixed rate is also modest next to the other inflation-protected Treasury. On 14 September 2026, Treasury's real yield curve put the 5-year Treasury Inflation-Protected Security at 2.40% above inflation and the 10-year at 2.60%. TIPS can be sold before maturity, but at a market price that moves, so selling early can lose money, and in a taxable account the inflation added to their principal is taxed every year even though it is paid only at maturity. The TIPS Calculator shows that yearly tax. Against a high-yield savings account, the I bond comes out ahead only when its tax advantages and rate outweigh the penalty over your holding period; the comparison page runs that race. The next I bond rates are announced on 1 November 2026. A bond bought before then keeps its 0.90% fixed rate for life, and its inflation rate follows CPI either way.
Frequently asked questions
How much will a $10,000 I bond be worth?
It depends on inflation after the first six months and on when you cash it. A $10,000 bond issued between May and October 2026 earns 4.26% a year for its first six months, reaching $10,213.00. If inflation then runs 3.4% a year, its rate is 4.30% for every later period. Cashed at 36 months, the bond pays $11,238.96 after the 3-month penalty; held to 60 months, it is worth $12,367.98 with no penalty.
How is the I bond rate calculated?
TreasuryDirect combines a fixed rate and a six-month inflation rate: fixed rate + 2 × six-month inflation rate + fixed rate × six-month inflation rate. For bonds issued 1 May to 31 October 2026 that is 0.0090 + 2 × 0.0167 + 0.0090 × 0.0167 = 0.0425503, rounded to 4.26%. The fixed rate stays for the life of the bond. The inflation rate is based on non-seasonally adjusted CPI-U and resets every six months; the 1.67% matches CPI-U's rise from 324.800 in September 2025 to 330.213 in March 2026. The combined rate never goes below zero.
What is the penalty for cashing an I bond early?
You cannot cash an I bond at all in its first 12 months. Between 12 months and five years you lose the last three months of interest: TreasuryDirect's example is that a bond cashed after 18 months pays 15 months of interest. In this page's example, cashing at month 36 forfeits $120.18. From month 60 there is no penalty.
When do I pay tax on I bond interest?
Federal income tax is due when you cash the bond or when it reaches final maturity at 30 years, whichever comes first, unless you choose to report the interest every year (IRS Publication 550). I bond interest is exempt from state and local income tax. In the example, $1,238.96 of interest owes $272.57 at a 22% federal rate and nothing to the state, which saves $61.95 at a 5% state rate compared with the same interest from a bank.
When do I bond rates change?
Treasury announces new rates every 1 May and 1 November. Your bond picks up a new inflation rate every six months counted from its issue month: a bond issued in May changes on 1 November and 1 May, one issued in September on 1 March and 1 September. The next rates are announced 1 November 2026, which is why this page asks for your own inflation assumption after the first six months.
How much can I buy in I bonds each year?
Up to $10,000 of electronic I bonds per Social Security number per calendar year, bought through TreasuryDirect. That is in addition to bonds you buy for a child or as gifts. Because the limit follows the Social Security number, spouses each have one, and a new calendar year brings a new limit.
Can I use I bonds for college tax-free?
Possibly. Interest spent on qualified higher education expenses can be excluded from federal income using Form 8815. For 2026 the exclusion begins to phase out above $101,800 of modified adjusted gross income, or $152,650 on a joint return, and is gone at $116,800, or $182,650 joint (Rev. Proc. 2025-32). A bond meant for college must be in an adult's name, not the child's.