I-Bond vs Treasury Bond 2027 Comparison Calculator
Compare US Series I Savings Bond (fixed + inflation composite) vs Treasury bonds (5y/10y/30y) for 2027. See after-tax yield, total return over 5 years, and inflation protection. Free, private.
| Bond type | Pre-tax yield | After-tax final value |
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What is an I-Bond and how does the composite rate work?
A Series I Savings Bond (I-Bond) is a 30-year US Treasury savings bond whose interest rate has two components: a fixed rate set at the time of purchase (locked for the bond's full 30-year life) and a semi-annual inflation rate based on changes in the Consumer Price Index for All Urban Consumers (CPI-U). The Treasury announces new fixed and inflation rates every May 1 and November 1 on TreasuryDirect.gov.
The composite rate is calculated as: composite = fixed + 2 × inflation + (fixed × inflation). In May 2026, the fixed rate is around 1.20% and the inflation component (annualized) is about 1.80%, producing a composite of roughly 3.02%. I-Bonds compound semi-annually but pay no current interest — all earnings accumulate inside the bond and are paid at redemption. Federal tax is deferred until you cash out (or until 30-year final maturity), and they are exempt from state and local income tax.
What is a Treasury bond and how does it differ?
A Treasury bond (T-Bond) is a US government debt instrument with maturity 10-30 years, paying a fixed coupon every 6 months at a rate set at auction. In 2027, the 10-year Treasury yields roughly 4.2-4.6% and the 30-year yields 4.4-4.8%. Treasuries pay coupons in cash that you must reinvest (or spend); the principal is repaid at face value at maturity.
Treasuries are state-tax exempt but coupon income is federally taxable each year as earned. They trade in a deep secondary market — you can sell any day at the prevailing price, which fluctuates inversely with rates (rates up = bond price down). Treasury notes (2-10 years) and T-bills (4 weeks to 1 year) work the same way at shorter maturities.
I-Bond vs Treasury — which is better in 2027?
The headline yield comparison favors Treasuries: ~4.4% on a 10-year vs ~3.0-3.5% on an I-Bond. But the after-tax and after-inflation picture is different. I-Bonds defer federal tax (you compound pretax for decades), and the inflation component automatically rises if inflation surges — protecting purchasing power. Treasuries lock in nominal yield; if 2030s inflation runs 4%+, the real return on a 4.4% Treasury approaches zero.
For a high-bracket taxpayer in a high-tax state (NY, CA, NJ): I-Bonds win the after-tax race over 5+ year holds. For someone in a 12% bracket in TX/FL: Treasuries win because the federal tax drag is small and the higher nominal yield matters more. The annual $10k electronic I-Bond limit ($15k with paper) is the real binding constraint for large investors.
How to use this calculator
Enter your investment amount, holding period (1-30 years), and the current I-Bond fixed rate (TreasuryDirect.gov publishes this) plus the current inflation rate component. Enter the comparable Treasury yield (e.g., 5-year if holding 5 years, 10-year if holding 10). Add your state and federal tax rates.
The calculator shows the after-tax final value of both options, accounting for: (1) I-Bond tax deferral and state exemption, (2) Treasury annual coupon tax with reinvestment, and (3) state exemption for both. The winner is determined by after-tax dollar return — not pre-tax yield. Use this when deciding where to park bond allocation in your taxable portfolio.
Source: TreasuryDirect.gov (Series I rates + Treasury yield data) and IRS Pub 550 (taxation of US obligations) — updated May 2026.