I-Bond Real Yield Calculator

Series I Savings Bond (I-Bond)

I-Bonds combine a fixed real rate with inflation protection. The composite rate adjusts every 6 months based on CPI-U.

The composite rate formula, exactly as Treasury writes it:

Composite = Fixed rate + (2 × Semiannual inflation) + (Fixed rate × Semiannual inflation)

Note where the 2 sits. It multiplies the inflation term only, and the cross-product at the end uses the semiannual inflation figure, not the doubled one. Get that wrong and you overstate the rate slightly, which is the kind of error nobody notices and everybody repeats.

For a rough answer the cross-product is small enough to drop: Composite ≈ Fixed rate + 2 × Semiannual inflation

The inflation input is the 6-month CPI-U change, not an annual figure. The 2× is what annualizes it.

A sample of fixed rates over the years. Treasury sets a new one each May and November, and it applies for the life of any bond bought in that window. These are historical reference points, not a current quote. Check TreasuryDirect for the rate in force today before you buy.

Composite rates worth remembering:

• May 2022 - Oct 2022: 9.62%, the record, driven by post-pandemic inflation
• May 2024 - Oct 2024: 4.28%
• Nov 2024 - Apr 2025: 3.11%

The fixed rate is the part that matters over a long hold. Two bonds bought six months apart can carry permanently different real returns, and unlike TIPS you cannot buy the old one afterwards.

I-Bond rules:

• Purchase limit: $10,000/year per person via TreasuryDirect ($5,000 extra paper via tax refund)
• Hold time: 1 year minimum (cannot redeem at all in first 12 months)
• Early redemption penalty: lose last 3 months of interest if redeemed in years 2-5
• Maximum hold: 30 years
• Tax treatment: federal tax only (NO state tax), tax-deferred until redemption
• Education exclusion: I-Bond interest tax-free if used for qualified higher education

I-Bonds vs alternatives:

When I-Bonds win:

• High inflation periods (2021-2023 sweet spot)
• Long-term emergency fund parking (after 1-year lockup)
• Tax-deferred income for high earners (no state tax)
• Education savings (tax-free if qualified)

When other instruments win:

• Need liquidity (a high-yield savings account wins, with no lockup)
• Low inflation environment (TIPS or Treasuries with higher fixed rates win)
• Already maxed at $10K/year (must use other instruments)
• Don’t want TreasuryDirect hassle (their UX is famously bad)

The “30-month flip” strategy: Some investors hold I-Bonds for exactly 30 months: get 27 months of interest, lose 3-month penalty. Maximizes inflation hedge while keeping average duration short.