How We Calculate I Bond Values
Every figure this calculator reports is built from the same published Treasury rates and the same official formula — applied precisely, down to the two-decimal rounding that keeps results accurate to the cent.
The Composite-Rate Formula
A Series I Bond earns a composite rate built from two pieces: a fixed rate set for the life of the bond and a variable inflation rate that the Treasury resets every six months. The Treasury combines them with this formula:
composite = fixed + (2 × inflation) + (fixed × inflation)
The composite rate is floored at 0% — it never goes negative, even during periods of deflation.
The detail that makes our numbers match TreasuryDirect exactly is rounding. TreasuryDirect announces — and computes its redemption values from — the composite rate rounded to two decimal places as a percentage (for example, 2.20%, not 2.20285%). We round the composite rate to that same 0.01% precision before compounding. Using the unrounded rate would nudge the semiannual $25 value across a half-cent boundary in some periods, which is the source of the one-cent discrepancies you see in calculators that skip this step.
How Interest Accrues
Semiannual Compounding
Interest compounds every six months. The composite rate is applied as a semiannual rate (half the annual composite), and each period's interest is added to the bond's value before the next period begins.
Monthly Within a Period
Inside the current six-month period, value accrues month by month, so partial periods are handled correctly. Bonds are always dated the first of the issue month and tick up on the first of each subsequent month.
Fixed Rate Is Locked
The fixed rate is determined by the bond's purchase month and stays constant for the entire 30-year life of the bond. Only the inflation component rotates — a new one applies every six months from the bond's issue date.
Per-Bond Rate Schedule
Each bond's six-month periods are measured relative to its own purchase month, and we look up whichever inflation rate the Treasury had in effect at the start of each of those periods.
Early-Redemption Penalty
I Bonds have a holding rule that affects redemption value:
- Before 5 years: redeeming forfeits the most recent three months' interest. We compute this exactly as the Treasury does — the redeemable value equals the accrued value as it stood three months earlier.
- After 5 years: there is no penalty. You keep all accrued interest.
Cent-Accurate by Design
Why the values line up to the cent
We apply the official Treasury formula exactly, including the two-decimal composite-rate rounding described above. That rounding is what closes the one-cent gaps that appear when the composite rate is left unrounded, so redemption values track the published Treasury figures precisely.
Data Source & Last Updated
- Source: Official rates published by TreasuryDirect (https://www.treasurydirect.gov/savings-bonds/i-bonds/i-bonds-interest-rates/).
- Coverage: The rate table spans every fixed and inflation rate from 1998 to present.
- Refresh cadence: Updated with each official Treasury announcement — every May and November.
- Last updated: June 13, 2026.
Disclaimer: This calculator is provided for informational and educational purposes only and is not financial advice. While we strive for accuracy, rates and regulations change and individual circumstances vary. Always confirm important decisions with the official TreasuryDirect redemption values or a qualified financial advisor.