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Series I Savings Bonds Rates & Terms: Calculating Interest Rates on I Bonds

In this section:

What interest will I get if I buy an I Bond now?

The composite rate for I bonds issued from November 1, 2014, through April 30, 2015, is  1.48%.

How do I Bonds earn interest?

An I Bond earns interest monthly from the first day of the month in the issue date. The interest accrues (is added to the bond) for up to 30 years.

  • The interest is compounded semiannually. Twice a year, on the 6th and 12th month anniversaries of the bond's issue date, all interest the bond has earned in previous months is in the bond's new principal value on which interest is earned for the next 6 months. For example, in month 7, interest is earned on the original price plus six months of interest. In month 13, interest is earned on the original price plus 12 months of interest.  (However, values displayed by the Savings Bond Calculator for bonds that are less than 5 years old do not include the latest 3 months of interest. These values reflect the interest penalty.) If you hold the bond for at least five years, when you cash in (redeem) the bond, you receive all the interest the bond has earned plus the amount you paid for the bond.
  • You can redeem the bond after 12 months. However, if you redeem the bond before it is five years old, you lose the last three months of interest.

How does Treasury figure the I Bond interest rate?

The interest on I Bonds is a combination of

  • a fixed rate, and
  • an inflation rate

To see the current value of your bonds, use the Savings Bond Calculator. When using the Savings Bond Calculator to look up values of bonds that are less than 5 years old, keep in mind that the values of those bonds do not include the latest three months of interest.  However, rates shown by the Savings Bond Calculator for those bonds do not reflect that interest penalty.

Fixed rate

You know the fixed rate of interest that you will get for your bond when you buy the bond. That fixed rate does not change during the life of the bond.

Treasury announces the fixed rate for I Bonds every six months (on the first business day in May and on the first business day in November). That fixed rate then applies to all I Bonds issued during the next six months.

The fixed rate is an annual rate. Compounding is semiannual.

Inflation rate

Unlike the fixed rate which does not change for the life of the bond, the inflation rate can and usually does change every six months.

We set the inflation rate every six months (on the first business day of May and on the first business day of November), based on changes in the nonseasonally adjusted Consumer Price Index for all Urban Consumers (CPI-U) for all items, including food and energy.

However, the change is applied to your bonds on the 6th and 12th month anniversaries of your bond's issue date.  (These anniversaries might not be May 1 and November 1.) When does my bond change rates?

Combining the two rates

To get the actual rate of interest (sometimes referred to as the composite or earnings rate) we combine the fixed rate and the inflation rate, using the equation in the example below.

  • The combined rate will never be less than 0. However, the combined rate can be lower than the fixed rate. If the inflation rate is negative (because we have deflation, not inflation), it can offset some of the fixed rate.
  • If the inflation rate is so negative that it would take away more than the fixed rate, we don't let that happen. We stop at 0.

An example

The composite rate for I bonds issued November 1, 2014 –April 30, 2015, is 1.48%
Here's how we set that composite rate:
Fixed rate 0.00%
Inflation rate 0.74%
Composite rate = [fixed rate + (2 x inflation rate) + (fixed rate x inflation rate)] [0.0000 + (2 x 0.0074) + (0.0000 x 0.0074)]
Composite rate [0.0000 + 0.0148 + 0.0000000]
Composite rate 0.0148
Composite rate 0.0148
Composite rate 1.48%
If your I Bond was issued earlier than May 1, 2011, your composite rate might be different. The inflation rate in the equation would be the same, but the composite rate would include the fixed rate you got when your bond was issued. For the actual value of your bond, use the Savings Bond Calculator.

When does my bond change rates?

Issue month of your bond New rates take effect
January January 1 / July 1
February February 1 / August 1
March March 1 / September 1
April April 1 / October 1
May May 1 / November 1
June June 1 / December 1
July July 1 / January 1
August August 1 / February 1
September September 1 / March 1
October October 1 / April 1
November November 1 / May 1
December December 1 / June 1

Because I bonds that are less than 5 years old have values that do not include the latest 3 months of interest, values displayed by the Savings Bond Calculator for these bonds will not reflect rate changes on the schedule in the table above (When does my bond change rates?) When looking at changes in values for these bonds, rate changes will seem to be delayed by 3 months.

What have the rates been in the past?

Fixed rates

The fixed rate applies to all bonds that we issue in the six months following the date the fixed rate is set. The same fixed rate applies for the life of the bond.

Date the fixed rate was set Fixed rate for bonds issued in the six months after that date
November 1, 2014 0.00%
May 1, 2014 0.10%
November 1, 2013 0.20%
May 1, 2013 0.00%
November 1, 2012 0.00%
May 1, 2012 0.00%
November 1, 2011 0.00%
May 1, 2011 0.00%
November 1, 2010 0.00%
May 1, 2010 0.20%
November 1, 2009 0.30%
May 1, 2009 0.10%
November 1, 2008 0.70%
May 1, 2008 0.00%
November 1, 2007 1.20%
May 1, 2007 1.30%
November 1, 2006 1.40%
May 1, 2006 1.40%
November 1, 2005 1.00%
May 1, 2005 1.20%
November 1, 2004 1.00%
May 1, 2004 1.00%
November 1, 2003 1.10%
May 1, 2003 1.10%
November 1, 2002 1.60%
May 1, 2002 2.00%
November 1, 2001 2.00%
May 1, 2001 3.00%
November 1, 2000 3.40%
May 1, 2000 3.60%
November 1, 1999 3.40%
May 1, 1999 3.30%
November 1, 1998 3.30%
September 1, 1998 3.40%

Inflation rate

The inflation rate applies to all I Bonds for the six months that the rate is in effect.

Date the inflation rate was set Inflation rate for six months
(See: When does my bond change rates?)
November 1, 2014 0.74%
May 1, 2014 0.92%
November 1, 2013 0.59%
May 1, 2013 0.59%
November 1, 2012 0.88%
May 1, 2012 1.10%
November 1, 2011 1.53%
May 1, 2011 2.30%
November 1, 2010 0.37%
May 1, 2010 0.77%
November 1, 2009 1.53%
May 1, 2009 -2.78%
November 1, 2008 2.46%
May 1, 2008 2.42%
November 1, 2007 1.53%
May 1, 2007 1.21%
November 1, 2006 1.55%
May 1, 2006 0.50%
November 1, 2005 2.85%
May 1, 2005 1.79%
November 1, 2004 1.33%
May 1, 2004 1.19%
November 1, 2003 0.54%
May 1, 2003 1.77%
November 1, 2002 1.23%
May 1, 2002 0.28%
November 1, 2001 1.19%
May 1, 2001 1.44%
November 1, 2000 1.52%
May 1, 2000 1.91%
November 1, 1999 1.76%
May 1, 1999 0.86%
November 1, 1998 0.86%
September 1, 1998 0.62%