I-Bond Calculator Calculator

What I-Bonds are and why they exist

I-Bonds are US Treasury savings bonds designed specifically to protect your purchasing power against inflation. Their interest rate has two components: a fixed rate set when you buy the bond (it stays the same for the entire 30-year life) and a variable rate that adjusts every six months based on changes in the Consumer Price Index (CPI). The composite of these two rates determines your actual earnings.

I-Bonds are considered risk-free because they're backed by the full faith and credit of the US government. Even if inflation turns negative (deflation), the composite rate can't go below 0%, and the bond's value always increases at least semi-annually. This makes them one of the safest investments you can hold.

Why it matters to your money

I-Bonds are the only investment that directly ties your interest earnings to inflation in real time. In periods of high inflation (like 2022, when the composite rate hit 9.62%), I-Bonds preserve purchasing power far better than savings accounts, CDs, or traditional bonds. They're also tax-deferred: you don't pay federal income tax on the interest until you redeem them, and state and local taxes never apply.

Read the full explainer on I-Bonds for details on purchase limits, tax rules, and how I-Bonds fit into a broader savings and investment strategy.

Rules of thumb

• $10,000/year per person: You can buy $10,000 electronically per calendar year per Social Security number, plus up to $5,000 more using your tax refund.
• 12-month minimum, 5-year sweet spot: I-Bonds must be held at least 12 months. Redeeming before 5 years forfeits the last 3 months of interest. After 5 years, there's no penalty.
• Tax advantage: Federal tax is deferred until redemption. State and local taxes never apply. If used for qualified education expenses, redemption may be entirely tax-free.