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 by Rakesh Choudhary, PhDMethodology & sources · 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 inflation rate is reset every six months from the change in CPI-U over six months, and it is a six-month rate, not an annual one. Composite rate = fixed + 2 × inflation + (fixed × inflation): 0.90% fixed with 1.67% inflation gives 0.0090 + 0.0334 + 0.00015 = 4.26%, which keeps total return aligned with inflation.
During the 2022 inflation spike, the six-month inflation rate hit 4.81%, a 9.62% composite rate for bonds with no fixed rate. For May to October 2026 the inflation rate is 1.67%, so new bonds earn 4.26% and older ones 3.34% to 7.00%, depending on their fixed rate. The fixed rate was 0.0% for most of 2010-2022 and reached 1.30% on bonds bought from November 2023 to October 2024; the last fixed rate above 1.5% was 1.60%, in November 2002. 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 (2.40% for bonds bought May to October 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. For the last 10 years of its 30, Treasury may change the rate or the way the bond earns interest, and must say so before year 20; the calculator assumes the same rate carries on. 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: joint returns from $152,650, with the exclusion gone at $182,650; all other returns from $101,800 to $116,800 (Rev. Proc. 2025-32). The bond's owner must be at least 24 years old when it is issued, so parents, not kids, should own the bonds.
FAQs
What's the difference between I Bonds and EE Bonds?
I Bonds: a fixed rate plus an inflation rate that resets every six months. New I bonds bought May to October 2026 earn 4.26%; older ones earn 3.34% to 7.00%, depending on their fixed rate. No risk of losing principal, and a hedge against inflation. Series EE Bonds: a fixed rate set when you buy (2.40% for May to October 2026), and GUARANTEED to double in value at 20 years, about 3.5% a year over those 20 years.
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 income tax: yes, but you can put it off until you cash the bond or it stops earning at 30 years. State and local income tax: none. Estate, gift and inheritance taxes can still apply. 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?
In any calendar year you can buy up to $10,000 of electronic I Bonds and $10,000 of electronic EE Bonds in your own name: $20,000 in all, or $40,000 for a married couple. Bonds you buy as gifts are on top of that. The old extra $5,000 of paper I Bonds through a tax refund ended on January 1, 2025, when I Bonds became electronic only.
Where do I buy savings bonds?
TreasuryDirect.gov is the only place to buy them, and new savings bonds are electronic only: paper I Bonds bought with a tax refund ended on January 1, 2025, and banks no longer sell paper bonds. Setting up a TreasuryDirect account is free and takes 10-15 minutes.