I Bond Calculator 2026
Calculate Series I Savings Bond interest using the Treasury composite rate formula. Enter purchase amount, rates, and holding period to see projected value, earned interest, and early-withdrawal penalty.
What Is a Series I Savings Bond?
A Series I Savings Bond is a US Treasury-issued savings bond that earns interest from two components: a fixed rate set at purchase (unchanged for 30 years) and a semiannual inflation rate announced by the Treasury every May and November. The composite rate combines both using the formula: Composite = Fixed + (2 x Inflation) + (Fixed x Inflation). I bonds are backed by the full faith and credit of the US government, exempt from state and local income tax, and can be deferred federally until redemption or maturity at 30 years.
The 2026 purchase limit is $10,000 per Social Security number per year through TreasuryDirect.gov, plus an extra $5,000 in paper bonds via tax refund. I bonds must be held at least 12 months and redeeming before 5 years forfeits the last 3 months of interest. After 5 years, no penalty applies.
How the Composite Rate Works
Because inflation resets every six months, your I bond earning rate changes twice a year on your personal anniversary and six months later. If inflation runs high, your composite rate climbs with it; if inflation falls, your rate falls too. The fixed rate is the portion of the composite rate that stays constant — a higher fixed rate means your real return (return above inflation) is guaranteed. In 2022 the composite rate hit 9.62 percent, driving a surge in I bond purchases; by late 2025 it had normalized closer to 4 percent.
I bond interest compounds semiannually, not annually, so a 4 percent composite rate earns slightly more than a 4 percent simple-interest savings account over the same holding period. This calculator projects value using semiannual compounding and shows the 3-month early-redemption penalty when you exit before year 5.
I Bond vs High-Yield Savings
High-yield savings accounts are fully liquid, FDIC-insured to $250,000, and currently pay 4 to 5 percent APY — but rates drop with Fed cuts. I bonds lock in a portion of return against inflation, exempt you from state tax, and carry a 30-year tax deferral, but charge a 3-month penalty if redeemed within 5 years and cap purchases at $10,000 per year. For short-term emergency savings, high-yield accounts win. For long-term inflation protection and tax efficiency, I bonds are hard to beat.
A common strategy: keep 3 to 6 months of expenses in high-yield savings, and park additional savings into I bonds up to the $10,000 annual limit. Over a decade, a married couple can accumulate $260,000 in inflation-protected Treasury bonds without touching brokerage accounts.
When I Bonds Make Sense
I bonds work best for multi-year savings goals where preserving purchasing power matters more than maximum liquidity. Think: a 5-year home down payment, a college fund, or an inflation-hedged slice of your emergency reserve. They are less useful for very short holding periods (less than 12 months is disallowed entirely) or for investors in 0 percent state-tax states who can get similar yield from high-yield savings with full liquidity. Last updated: April 2026, based on Treasury composite rate formulas and current 2026 tax brackets.