The current composite interest rate for I bonds issued from November 2024 through April 2025 is 3.11%. This rate combines a fixed rate and an inflation rate component, offering a return that adjusts with economic changes. Understanding how this rate is calculated and when it applies to your bonds is crucial for investors looking to leverage I bonds for savings.
Understanding the Composite Rate for I Bonds
The interest rate for I bonds is not a single, static number. It’s a composite rate made up of two parts:
- Fixed rate: This rate is set when the bond is issued and remains the same for the life of the bond. For I bonds issued from November 2024 through April 2025, the fixed rate is 1.20%.
- Inflation rate: This rate changes every six months, reflecting the semiannual inflation rate. For the period from November 2024, the semiannual inflation rate is 0.95%.
The composite rate is calculated using a formula that combines these two rates:
Composite rate = Fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)
Let’s break down the calculation for the current rate of 3.11%:
| Component | Rate |
|---|---|
| Fixed rate | 1.20% |
| Semiannual inflation rate | 0.95% |
| Formula: [Fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)] | |
| Calculation | [0.0120 + (2 x 0.0095) + (0.0120 x 0.0095)] |
| Breakdown | [0.0120 + 0.0190 + 0.0001140] |
| Sum | 0.031114 |
| Rounded Rate | 0.0311 |
| Composite Rate Percentage | 3.11% |
This composite rate ensures that your I bonds offer protection against inflation while providing a guaranteed fixed return component.
How Often Do I Bond Interest Rates Change?
While the fixed rate remains constant, the composite rate for I bonds changes every six months due to adjustments in the inflation rate. It’s important to note that the date your interest rate changes is based on the issue month of your bond, not the announcement dates in May and November.
Refer to the table below to understand when your interest rate adjusts:
| If your bond was issued in | Your interest rate changes every: |
|---|---|
| January | July 1 and January 1 |
| February | August 1 and February 1 |
| March | September 1 and March 1 |
| April | October 1 and April 1 |
| May | November 1 and May 1 |
| June | December 1 and June 1 |
| July | January 1 and July 1 |
| August | February 1 and August 1 |
| September | March 1 and September 1 |
| October | April 1 and October 1 |
| November | May 1 and November 1 |
| December | June 1 and December 1 |
This schedule ensures that every I bondholder experiences the updated inflation component of the interest rate twice a year, keeping the return aligned with current economic conditions.
Interest Compounding and Growth of Your I Bond
I bonds not only earn interest but also benefit from semiannual compounding. This means that twice a year, the interest earned over the previous six months is added to the bond’s principal value. The new interest rate for the next six-month period is then applied to this increased value, allowing your earnings to grow on a larger base.
This compounding effect significantly enhances the long-term growth potential of I bonds. To check the current value of your I bonds, you can:
- TreasuryDirect Account: If you purchased your bonds electronically, you can find the current value in your TreasuryDirect account.
- Savings Bond Calculator: For paper bonds or for projections, the Savings Bond Calculator is a useful tool.
Important Note: For I bonds held for less than five years, the value displayed might not include the last three months of interest. This is because if you redeem an I bond before it reaches five years, you forfeit the final three months of interest as a small early redemption penalty.
Historical Context of I Bond Interest Rates
Understanding historical interest rates can provide valuable context. I bond rates have varied over time, reflecting changes in both fixed rate policies and inflation.
Fixed Rate History
The fixed rate component is set in May and November and applies to bonds issued in the subsequent six months. This rate remains constant for the bond’s duration.
| Date Fixed Rate Set | Fixed Rate for Bonds Issued After Date |
|---|---|
| November 1, 2024 | 1.20% |
| May 1, 2024 | 1.30% |
| November 1, 2023 | 1.30% |
| May 1, 2023 | 0.90% |
| November 1, 2022 | 0.40% |
| May 1, 2022 | 0.00% |
| November 1, 2021 | 0.00% |
| May 1, 2021 | 0.00% |
| November 1, 2020 | 0.00% |
| May 1, 2020 | 0.00% |
| November 1, 2019 | 0.20% |
| May 1, 2019 | 0.50% |
| November 1, 2018 | 0.50% |
| May 1, 2018 | 0.30% |
| November 1, 2017 | 0.10% |
| May 1, 2017 | 0.00% |
| November 1, 2016 | 0.00% |
| May 1, 2016 | 0.10% |
| November 1, 2015 | 0.10% |
| May 1, 2015 | 0.00% |
| November 1, 2014 | 0.00% |
| May 1, 2014 | 0.10% |
| November 1, 2013 | 0.20% |
| May 1, 2013 | 0.00% |
| November 1, 2012 | 0.00% |
| May 1, 2012 | 0.00% |
| November 1, 2011 | 0.00% |
| May 1, 2011 | 0.00% |
| November 1, 2010 | 0.00% |
| May 1, 2010 | 0.20% |
| November 1, 2009 | 0.30% |
| May 1, 2009 | 0.10% |
| November 1, 2008 | 0.70% |
| May 1, 2008 | 0.00% |
| November 1, 2007 | 1.20% |
| May 1, 2007 | 1.30% |
| November 1, 2006 | 1.40% |
| May 1, 2006 | 1.40% |
| November 1, 2005 | 1.00% |
| May 1, 2005 | 1.20% |
| November 1, 2004 | 1.00% |
| May 1, 2004 | 1.00% |
| November 1, 2003 | 1.10% |
| May 1, 2003 | 1.10% |
| November 1, 2002 | 1.60% |
| May 1, 2002 | 2.00% |
| November 1, 2001 | 2.00% |
| May 1, 2001 | 3.00% |
| November 1, 2000 | 3.40% |
| May 1, 2000 | 3.60% |
| November 1, 1999 | 3.40% |
| May 1, 1999 | 3.30% |
| November 1, 1998 | 3.30% |
| September 1, 1998 | 3.40% |
Inflation Rate History
The inflation rate, on the other hand, is reset every May and November and applies to all outstanding I bonds for a six-month period.
| Date Inflation Rate Set | Inflation Rate for All I Bonds (6-Month Period) |
|---|---|
| November 1, 2024 | 0.95% |
| May 1, 2024 | 1.48% |
| November 1, 2023 | 1.97% |
| May 1, 2023 | 1.69% |
| November 1, 2022 | 3.24% |
| May 1, 2022 | 4.81% |
| November 1, 2021 | 3.56% |
| May 1, 2021 | 1.77% |
| November 1, 2020 | 0.84% |
| May 1, 2020 | 0.53% |
| November 1, 2019 | 1.01% |
| May 1, 2019 | 0.70% |
| November 1, 2018 | 1.16% |
| May 1, 2018 | 1.11% |
| November 1, 2017 | 1.24% |
| May 1, 2017 | 0.98% |
| November 1, 2016 | 1.38% |
| May 1, 2016 | 0.08% |
| November 1, 2015 | 0.77% |
| May 1, 2015 | -0.80% |
| November 1, 2014 | 0.74% |
| May 1, 2014 | 0.92% |
| November 1, 2013 | 0.59% |
| May 1, 2013 | 0.59% |
| November 1, 2012 | 0.88% |
| May 1, 2012 | 1.10% |
| November 1, 2011 | 1.53% |
| May 1, 2011 | 2.30% |
| November 1, 2010 | 0.37% |
| May 1, 2010 | 0.77% |
| November 1, 2009 | 1.53% |
| May 1, 2009 | -2.78% |
| November 1, 2008 | 2.46% |
| May 1, 2008 | 2.42% |
| November 1, 2007 | 1.53% |
| May 1, 2007 | 1.21% |
| November 1, 2006 | 1.55% |
| May 1, 2006 | 0.50% |
| November 1, 2005 | 2.85% |
| May 1, 2005 | 1.79% |
| November 1, 2004 | 1.33% |
| May 1, 2004 | 1.19% |
| November 1, 2003 | 0.54% |
| May 1, 2003 | 1.77% |
| November 1, 2002 | 1.23% |
| May 1, 2002 | 0.28% |
| November 1, 2001 | 1.19% |
| May 1, 2001 | 1.44% |
| November 1, 2000 | 1.52% |
| May 1, 2000 | 1.91% |
| November 1, 1999 | 1.76% |
| May 1, 1999 | 0.86% |
| November 1, 1998 | 0.86% |
| September 1, 1998 | 0.62% |
Current Composite Rate Trends
The composite rate, reflecting both fixed and inflation components, provides a comprehensive view of the interest being earned on I bonds over different periods.
| Purchase Period | Composite Rate (Nov 2024 – Apr 2025) |
|---|---|
| Nov. 2024 – Apr. 2025 | 3.11% |
| May 2024 – Oct. 2024 | 3.21% |
| Nov. 2023 – Apr. 2024 | 3.21% |
| May 2023 – Oct. 2023 | 2.81% |
| Nov. 2022 – Apr. 2023 | 2.30% |
| May 2022 – Oct. 2022 | 1.90% |
| Nov. 2021 – Apr. 2022 | 1.90% |
| May 2021 – Oct. 2021 | 1.90% |
| Nov. 2020 – Apr. 2021 | 1.90% |
| May 2020 – Oct. 2020 | 1.90% |
| Nov. 2019 – Apr. 2020 | 2.10% |
| May 2019 – Oct. 2019 | 2.40% |
| Nov. 2018 – Apr. 2019 | 2.40% |
| May 2018 – Oct. 2018 | 2.20% |
| Nov. 2017 – Apr. 2018 | 2.00% |
| May 2017 – Oct. 2017 | 1.90% |
| Nov. 2016 – Apr. 2017 | 1.90% |
| May 2016 – Oct. 2016 | 2.00% |
| Nov. 2015 – Apr. 2016 | 2.00% |
| May 2015 – Oct. 2015 | 1.90% |
| Nov. 2014 – Apr. 2015 | 1.90% |
| May 2014 – Oct. 2014 | 2.00% |
| Nov. 2013 – Apr. 2014 | 2.10% |
| May 2013 – Oct. 2013 | 1.90% |
| Nov. 2012 – Apr. 2013 | 1.90% |
| May 2012 – Oct. 2012 | 1.90% |
| Nov. 2011 – Apr. 2012 | 1.90% |
| May 2011 – Oct. 2011 | 1.90% |
| Nov. 2010 – Apr. 2011 | 1.90% |
| May 2010 – Oct. 2010 | 2.10% |
| Nov. 2009 – Apr. 2010 | 2.20% |
| May 2009 – Oct. 2009 | 2.00% |
| Nov. 2008 – Apr. 2009 | 2.61% |
| May 2008 – Oct. 2008 | 1.90% |
| Nov. 2007 – Apr. 2008 | 3.11% |
| May 2007 – Oct. 2007 | 3.21% |
| Nov. 2006 – Apr. 2007 | 3.31% |
| May 2006 – Oct. 2006 | 3.31% |
| Nov. 2005 – Apr. 2006 | 2.91% |
| May 2005 – Oct. 2005 | 3.11% |
| Nov. 2004 – Apr. 2005 | 2.91% |
| May 2004 – Oct. 2004 | 2.91% |
| Nov. 2003 – Apr. 2004 | 3.01% |
| May 2003 – Oct. 2003 | 3.01% |
| Nov. 2002 – Apr. 2003 | 3.52% |
| May 2002 – Oct. 2002 | 3.92% |
| Nov. 2001 – Apr. 2002 | 3.92% |
| May 2001 – Oct. 2001 | 4.93% |
| Nov. 2000 – Apr. 2001 | 5.33% |
| May 2000 – Oct. 2000 | 5.53% |
| Nov. 1999 – Apr. 2000 | 5.33% |
| May 1999 – Oct. 1999 | 5.23% |
| Nov. 1998 – Apr. 1999 | 5.23% |
| Sept. 1998 – Oct. 1998 | 5.33% |
In conclusion, the current interest rate for I bonds is a dynamic figure influenced by both a fixed rate and semiannual inflation adjustments. For bonds issued from November 2024 through April 2025, the composite rate stands at 3.11%. Understanding these components and historical trends is key to making informed decisions about investing in I bonds as a tool for savings and inflation protection.
