I Bond Purchase Strategy Calculator

I Bonds (Series I Savings Bonds) are inflation-protected US Treasury bonds offering tax-deferred growth and inflation tracking. The composite rate has two components: a fixed rate set at purchase (and locked for the bond's life) plus a variable inflation rate that resets every 6 months. Tax is deferred up to 30 years — you only owe federal tax when you redeem (state tax exempt). Annual purchase limit: $10,000 per individual at TreasuryDirect plus $5,000 via tax refund Form 8888.

Composite Rate Mechanics

I Bond composite rate = fixed rate + variable inflation rate + (fixed × variable). The variable rate equals annualized CPI-U change over the prior 6 months. Rate resets occur every May 1 and November 1. The fixed rate is locked when you buy and doesn't change — historic fixed rates: 0% (2021-2022), 0.4% (Nov 2022), 0.9% (May 2023), 1.3% (Nov 2023-2024), varying since. Higher fixed rate = better long-term I Bond.

Withdrawal Rules

I Bonds have several withdrawal restrictions: (1) Cannot redeem in first 12 months at all. (2) Redemption between 12 and 60 months forfeits last 3 months of interest. (3) After 5 years, no penalty. (4) After 30 years, the bond stops earning interest. Plan your purchases as a 5+ year commitment for maximum flexibility.

Tax Benefits

I Bonds are tax-deferred up to 30 years — you don't pay tax until redemption or year 30 (whichever comes first). State tax exempt. Federal tax can be further deferred or eliminated through the education exclusion (Form 8815): if you redeem to pay qualified education expenses and your MAGI is below limits, the interest is completely tax-free. Limits in 2026: phase-out begins at $96,800 single / $145,200 MFJ. Source: TreasuryDirect, IRS Pub 970.

Last updated May 2026. Sources: TreasuryDirect I Bonds.