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Series I Bond Rate Calculator
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Series I Bonds are inflation-pegged bonds offered by the Treasury. The interest rate you earn is a calculation that takes into account the fixed rate of your particular bond, a rate set every 6 months and follows your bond for the rest of its life, and an inflation rate that changes every six months to correspond with the CPI-U inflation rate. Here is a list of the Series I bond’s historic rates.
The equation itself isn’t particularly complicated and is:
Composite rate = [Fixed rate + (2 x Semiannual inflation rate) + (Fixed rate x Semiannual inflation rate)]
Using it to calculate the latest inflation rate data (announced November 1st, 2008), we calculate bonds bought in this period to be earning an APY of 5.64%:
Fixed rate = 0.70% (this fixed portion remains the same until you redeem the bond)
Semiannual inflation rate = 2.46% (in May 2009, this number will change)
Composite rate = [Fixed rate + (2 x Semiannual inflation rate) + (Fixed rate x Semiannual inflation rate)]
Composite rate = [0.0070 + (2 x 0.0246) + (0.0070 x 0.0246)]
Composite rate = [0.0070 + 0.0492 + 0.0001722]
Composite rate = [0.0563722]
Composite rate = 0.0564
Composite rate = 5.64%
Series I Bond Rate Calculator
Here’s a handy calculator to help you calculate the yield:
(photo by allyrose18)
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You’re churning out calculators left and right aren’t you?
Jim,
I bought a 1000.00 I bond in 02/2001, and another in 03/2001. I am not getting what your calulator says. My rates for each are 8.40%; and my yeild is 6.32 and 6.30, respectively. According to your scale, my fixed interest is 3 and 2 per cent for may 1, 01 and Nov 1, 01. What did I do wrong? 3.568% is what I got using your formula.
Jan
You may have entered in the incorrect values into the calculator.
Your 3% and 2% figures are correct, but you must use the current inflation rate of -2.78%. That makes your current total rate on both bonds 0% (it’s negative but they can never return negative).