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I Bond Rates
The rate of an I bond is based on two separate rates, one of which remains constant
for the life of the bond, and another linked to changes in the CPI-U measurement.
The composite I bond rate changes every 6 months from the issue date to reflect the change in inflation.
Current I Bond Rate for a new bond:
Current rates for a new bond. Valid May 2020 - October 2020
- Fixed rate: 0.00%
- Semi-annual CPI-U change: 0.53%
- Variable rate: 1.06%
- Composite rate: 1.06%
Next I bond rate
The next I bond rate change will be on November 1, 2020
May Rate:
|
Sept.
|
Oct.
|
Nov.
|
Dec.
|
Jan.
|
Feb.
|
Mar.
|
| 256.759 |
257.346 |
257.208 |
256.974 |
257.971 |
258.678 |
258.115 |
Nov. Rate:
|
March
|
April
|
May
|
June
|
July
|
Aug.
|
Sept.
|
| 258.115 |
|
|
|
|
|
|
Composition of the I Bond Rate
I Bond rates are based on two factors: the fixed rate
and the inflation-linked variable. The fixed rate is established by the Treasury
Department by an unknown process. The inflation-linked rate
is based on the rate of inflation over the past 6 months as measured by the CPI-U.
The two rates are used in a formula to determine the composite
rate of the I Bond. Every six months from the purchase month, an I Bond's
rate will change based on the new inflation value. The fixed rate will remain the
same throughout the life of the bond.
I Bond Rate Formula to Determine the Composite Rate
Composite Rate =
Fixed rate + 2 * CPI-U Rate +
(Fixed rate * CPI-U Rate)
I Bond Rate Change Effective Date
The composite rate of a bond will change every 6 months based on the changes in
inflation. Since every bond must have 6 full months with the inflation-linked rate
active, the composite rate of a bond will not change to reflect the new inflation-linked
rate until that bond's six month anniversary. The following chart shows when a bond
will change rates for the May and November adjustments based on the issue month
of the bond.
|
January
|
July 1
|
January 1
|
|
February
|
August 1
|
February 1
|
|
March
|
September 1
|
March 1
|
|
April
|
October 1
|
April 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
|
May 1
|
November 1
|
|
December
|
June 1
|
December 1
|
Example: An I bond purchased in October will begin with a composite rate
based on the fixed rate and inflation-linked rate announced in May. On November
1st, the new inflation data is released, but the bond has not reached the six month
anniversary, so the rate will not change. On April 1, the October I Bond will change
to reflect the new inflation-linked rate announced in November, but will maintain
the same fixed rate it had in October. The new composite rate will be comprised
of the fixed rate from when the bond was purchased and the inflation-linked rate
announced in November. In May, the inflation data will again be announced, but that
rate will not go into effect for this October-issued bond until October.
I Bond Rate Calculator
Use this calculator to calculate an I bond's rate. Enter the CPI-U growth rate and
the fixed rate you think will be chosen to calculate the I bond's new rate.
Related Topics
Page last modified 5/11/2020