I Savings Bonds Rates & Terms
I Bonds earn interest from the first day of their issue month.
- You can redeem them at any time after a twelve-month minimum holding period
- They are an accrual-type security
- They increase in value monthly and the interest is paid when you redeem the bond
- I Bonds are sold at face value; i.e., you pay $50 for a $50 I Bond
- I Bonds grow in value with inflation-indexed earnings for up to 30 years
If you redeem I Bonds before they’re five years old, you’ll forfeit the three most recent months’ interest; at or after 5-years old, you won’t be penalized.
Rates
The I Bond earnings rate is a combination of two separate rates; a fixed rate and an inflation rate:
Fixed Rate:
- Announced each May and November
- Applies to all bonds issued during the six months period beginning with the announcement date.
- Remains the same for the life of the bond
The Secretary of the Treasury, or the Secretary’s designee, determines the fixed rate of return. The fixed rate is established for the life of the bond. The fixed rate will always be greater than or equal to 0.00%. However, the fixed rate is not a guaranteed minimum rate; the composite rate could possibly be less than the fixed rate in deflationary situations. The Secretary’s determination of fixed rates of return, semiannual inflation rates, composite rates, and savings bonds redemption values is final and conclusive.
Inflation Rate:
- Announced each May and November
- Based on changes in the Consumer Price Index for all Urban Consumers (CPI-U)
- Is combined with the fixed rate to determine the earning rate of the bond every six months*
In certain deflationary situations, the semiannual inflation rate may be negative. Negative semiannual inflation rates will be used in the same way as positive semiannual inflation rates. However, if the semiannual inflation rate is negative to the extent that it completely offsets the fixed rate of return, the redemption value of a Series I bond for any particular month will not be less than the value for the preceding month.
*See Composite Rates below for more information.
Fixed Rates
I bond fixed rates are determined each May 1 and November 1. Each fixed rate applies to all I bonds issued in the six months following the rate determination.
| DATE | FIXED RATES* |
|---|---|
| MAY 1, 2009 | 0.10% |
| NOV 1, 2008 | 0.70% |
| MAY 1, 2008 | 0.00% |
| NOV 1, 2007 | 1.20% |
| MAY 1, 2007 | 1.30% |
| NOV 1, 2006 | 1.40% |
| MAY 1, 2006 | 1.40% |
| NOV 1, 2005 | 1.00% |
| MAY 1, 2005 | 1.20% |
| NOV 1, 2004 | 1.00% |
| MAY 1, 2004 | 1.00% |
| NOV 1, 2003 | 1.10% |
| MAY 1, 2003 | 1.10% |
| NOV 1, 2002 | 1.60% |
| MAY 1, 2002 | 2.00% |
| NOV 1, 2001 | 2.00% |
| MAY 1, 2001 | 3.00% |
| NOV 1, 2000 | 3.40% |
| MAY 1, 2000 | 3.60% |
| NOV 1, 1999 | 3.40% |
| MAY 1, 1999 | 3.30% |
| NOV 1, 1998 | 3.30% |
| SEP 1, 1998 | 3.40% |
| *Annual rates compounded semiannually | |
Inflation Rates
The semiannual inflation rate is determined each May 1 and November 1. Each semiannual inflation rate applies to all outstanding I Bonds for six months.
| DATE | INFLATION RATES* |
|---|---|
| MAY 1, 2009 | -2.78% |
| NOV 1, 2008 | 2.46% |
| MAY 1, 2008 | 2.42% |
| NOV 1, 2007 | 1.53% |
| MAY 1, 2007 | 1.21% |
| NOV 1, 2006 | 1.55% |
| MAY 1, 2006 | 0.50% |
| NOV 1, 2005 | 2.85% |
| MAY 1, 2005 | 1.79% |
| NOV 1, 2004 | 1.33% |
| MAY 1, 2004 | 1.19% |
| NOV 1, 2003 | 0.54% |
| MAY 1, 2003 | 1.77% |
| NOV 1, 2002 | 1.23% |
| MAY 1, 2002 | 0.28% |
| NOV 1, 2001 | 1.19% |
| MAY 1, 2001 | 1.44% |
| NOV 1, 2000 | 1.52% |
| MAY 1, 2000 | 1.91% |
| NOV 1, 1999 | 1.76% |
| MAY 1, 1999 | 0.86% |
| NOV 1, 1998 | 0.86% |
| SEP 1, 1998 | 0.62% |
| *Semiannual rates | |
Composite Earnings Rates
Fixed rates and semiannual inflation rates are combined to determine composite earnings rates. An I Bond's composite earnings rate changes every six months after its issue date. For example, the earnings rate for an I bond issued in March 1999 changes every March and September.
If you would like to find the composite rates your bonds are earning, try our online Savings Bonds Calculator.
Here's how the composite rate for I bonds issued May 2009 - Oct. 2009 was set:
Fixed rate = 0.10%
Semiannual inflation rate = -2.78%
Composite rate = [Fixed rate + (2 x Semiannual inflation rate) + (Fixed rate x Semiannual inflation rate)]
Composite rate = [0.0010 + (2 x -0.0278) + (0.0010 x -0.0278)]
Composite rate = [0.0010 + -0.0556 + -0.0000278]
Composite rate = [-0.0546278]
Composite rate = -0.0546
Composite rate = -5.46%
Composite rate = 0.00% (Composite rates are never less than zero)
