Savings Bond Calculator
Estimate I Bond and EE Bond value over time. State tax-free, federal tax deferred until redemption. Education exclusion possible.
Reviewed & updated for 2026 · How we calculate
I Bond rate mechanics: fixed + inflation, every six months
An I Bond's composite rate is built from two numbers set by Treasury twice a year (May 1 and November 1). The fixed rate is locked in for the 30-year life of that specific bond. The variable rate is reset every six months based on the change in CPI-U over the prior six months, annualized. Composite rate = fixed + 2 × variable + (fixed × variable), which keeps total return aligned with inflation.
During the 2022 inflation spike, the variable rate hit 9.62%, driving total composite rates briefly above 9%. By 2026, with inflation settled in the 2-3% range, composite rates are in the 3-5% zone depending on the fixed rate of the issue. The fixed rate has ranged from 0.0% (most of 2010-2022) to 1.5%+ on recent vintages. Holding an old I Bond with a high fixed rate during a high inflation period is the best of both worlds, and one reason many investors max purchases when fixed rates spike.
Interest accrues monthly and compounds semiannually. Bonds bought any day of a month earn interest for the full month, so buying late in the month (e.g., May 31) gives a small timing advantage, you get a full month's interest for less than a day of holding.
Series EE Bonds: the guaranteed doubling
Series EE Bonds pay a fixed rate set at purchase (currently around 2.7% as of 2026), but Treasury guarantees that the bond will double in value at exactly 20 years from issue date. If accumulated interest at the stated rate doesn't get you to 2× face value by year 20, Treasury adds a one-time adjustment. That makes the effective yield to year 20 about 3.5% annually, better than the stated rate when the stated rate is low.
The catch: redeem before year 20 and you only get the stated rate plus accrued interest, no doubling. After year 20, the bond reverts to the stated rate for years 20-30. EE Bonds essentially become a guaranteed 20-year zero-coupon investment with a known terminal value, useful for predictable goals like college tuition exactly 20 years out.
Tax features worth understanding
State and local tax exemption: Savings bond interest is exempt from state and local income tax. For California or New York residents in high brackets, this alone adds 5-10% to effective yield compared to a taxable savings account.
Federal deferral until redemption: You don't owe federal income tax on accrued interest until you cash the bond or it matures. This lets interest compound on the full amount, including the tax you'd otherwise pay each year. Over 20-30 years this materially increases total return.
Education exclusion (IRC §135): If you redeem I Bonds or EE Bonds (purchased after 1989) to pay qualified higher education expenses for yourself, your spouse, or a dependent, the interest can be fully federal-tax-free. Income phase-out for 2026: MFJ phase-out begins around $151,600 with full exclusion lost above $181,600 (single: $101,300/$116,300). The bond must be purchased by someone at least 24 years old, so parents, not kids, should own the bonds.
FAQs
What's the difference between I Bonds and EE Bonds?
I Bonds: variable rate (combines fixed + inflation rate). Currently around 3-5% depending on cycle. No risk of losing principal. Hedge against inflation. Series EE Bonds: fixed rate at issue, GUARANTEED to double in value at 20 years (effective ~3.5% yield). Lower current rates but guaranteed doubling.
How long must I hold a savings bond?
Minimum 1 year before redemption. If redeemed before 5 years: lose last 3 months of interest. After 5 years: no penalty. Maximum maturity: 30 years (stops earning interest after that). Most people hold to maturity for the guaranteed doubling (EE) or full inflation protection (I).
Are savings bonds tax-free?
Federal tax: yes when redeemed, partially deferrable while held. State and local tax: ALWAYS FREE (no state tax on Treasury securities). Education exclusion: I Bonds and EE Bonds redeemed for qualified higher education expenses can be 100% federal tax-free (income limits apply).
What's the purchase limit?
Annual electronic purchase limit: $10,000 per person for I Bonds + $10,000 for EE Bonds = $20,000 total. Plus $5,000 paper I Bonds via tax refund (using Form 8888). So maximum: $25,000/year per person. Married couple: $50,000/year max.
Where do I buy savings bonds?
TreasuryDirect.gov is the only place to buy electronic savings bonds. Paper bonds are only available via tax refund (Form 8888). Banks no longer sell paper bonds. Setting up a TreasuryDirect account is free and takes 10-15 minutes.