An I bond’s interest rate has two parts — a fixed rate that never changes for the life of the bond, and an inflation rate that resets every six months — combined into one composite rate.
How it works
Composite rate = fixed rate + (2 × semiannual inflation rate) + (fixed rate × semiannual inflation rate). The cross term exists because the fixed rate compounds on the inflation-adjusted principal, not the original face value — simply adding the two rates would understate the true composite slightly.
What this does not include
I bonds purchased in different months lock in different fixed rates for life and reset their inflation component on different six-month cycles — this calculator computes one rate period at a time, not a bond’s full multi-year earning history.
How to use this calculator
- Enter your bond’s fixed rate (set at purchase, fixed for life) and the current semiannual inflation rate.
- Optionally enter your principal to see six months of expected interest.
Frequently asked questions
Can the composite rate go below zero?
No — Treasury rules floor the composite rate at 0%, even if deflation would otherwise push the formula’s raw result negative.
Does the fixed rate ever change on a bond I already own?
No — the fixed rate is locked in for the life of the bond at purchase; only the inflation component resets every six months.
Why the extra cross term instead of just adding the two rates?
Because the fixed rate earns on top of the inflation-adjusted principal, not the original amount — the cross term captures that compounding effect precisely.
