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What is I Bond + TIPS Calculator?

A I Bond + TIPS Calculator computes the tip amount and total bill split per person. It applies the standard formula to the values you enter and returns the result instantly, without sending any data to a server. Composite rate = fixed + 2 x semi-annual inflation + (fixed x inflation).

I Bond + TIPS Calculator

Estimate Series I Savings Bond composite rate and compare to TIPS real yield.

🔒 Browser-only ⚡ Instant 💸 Free forever 📡 Works offline 🚫 No signup
← US Finance
Estimates only. Not tax, legal, or financial advice. Verify with your CPA, advisor, or the relevant IRS / SSA / CMS source for decisions with material impact.

TLDR

Series I Bonds pay a fixed rate plus an inflation rate that resets every 6 months. The composite rate floor is 0%, never negative. Limit: $10K per person per year direct purchase plus $5K via tax refund. Compare to TIPS - similar inflation protection but tradable on secondary market.

How to use this calculator

  1. Enter your inputs. Each field is labeled with its unit (dollars, percent, age, etc.).
  2. Read the result instantly. Numbers update as you type - no submit button.
  3. Adjust to test sensitivity. Change one input at a time to see what moves the result most.
  4. Cross-check the formula in the section below. Calculator math should match the published formula.
  5. Copy or screenshot the result for later. The site does not save anything; close the tab and inputs are gone.

About this tool + formula

This calculator uses real 2025-26 IRS, SSA, and CMS published values. The math runs entirely in your browser - nothing is sent to a server. The underlying formula is:

composite_rate = fixed + 2 * semi_annual_inflation + (fixed * semi_annual_inflation)
FV = amount * (1 + composite_rate)^years
early_redemption_penalty = last 3 months interest if redeemed before 5 years

Sources: IRS contribution limits, SSA reduction factors, CMS Medicare premium tables, US Treasury auction yields, HHS Federal Poverty Guidelines. Numbers are refreshed annually as new figures publish.

Real-world scenarios where this calculator helps

Inflation hedge in cash bucket

Holding $20K in checking earning 0.05% gets eaten by inflation. Move it to I Bonds (after 1-yr lockup, accept it is illiquid that long) and earn the composite rate instead.

College savings supplement

I Bonds in your name can be redeemed tax-free for qualified education expenses (subject to MAGI limits). Useful supplement to a 529 for high-bracket families.

Tax-deferral until redemption

I Bond interest is federal-taxable but can be deferred until redemption (up to 30 years). State and local always exempt.

TIPS for institutional comparison

Real yield + inflation > I Bond composite? Buy TIPS in IRA. Need accessibility outside an IRA without immediate tax? I Bonds win.

What this tool does

  • Computes the I Bond composite rate from fixed + semi-annual inflation.
  • Projects future value at the composite rate over your selected period.
  • Applies the early-redemption penalty (last 3 months interest if redeemed before 5 years).
  • Reports federal tax owed on accrued interest at redemption.
  • Compares to a TIPS at your selected real yield.

What it does NOT handle

  • Doesn't model the fact that the inflation rate resets every 6 months (it uses your single input).
  • Doesn't enforce the 1-year minimum holding period (cannot redeem at all in year 1).
  • Doesn't model the education tax exclusion MAGI phaseout.
  • Doesn't include state tax (correct - I Bonds and TIPS are state-exempt).
  • Doesn't model TIPS phantom income (annual federal tax on inflation accrual in taxable accounts).

Common mistakes and pitfalls

  • Treating I Bond as a 1-year investment. You cannot redeem at all for 12 months, and lose 3 months interest if you redeem before 5 years.
  • Buying I Bonds inside an IRA. You cannot - I Bonds are only purchasable through TreasuryDirect for individuals.
  • Forgetting the $10K + $5K limit. Direct purchase max is $10K per Social Security number per year. Plus $5K paper bonds via tax refund (Form 8888).
  • Missing the rate-reset schedule. New rates announced first business day of May and November. Buying in late October locks in the prior rate for 6 months.
  • Confusing fixed rate with composite. The fixed rate stays constant for the bond's life. The inflation rate resets. Composite is a moving combination.

Frequently asked questions

What is the current I Bond composite rate?

As of November 2024 - April 2025: 3.11% (fixed 1.20% + inflation portion 1.90%). Recheck TreasuryDirect at the May / November resets.

How much can I buy?

$10,000 per person per calendar year direct purchase via TreasuryDirect, plus $5,000 paper bonds purchased with your federal tax refund (Form 8888).

How long do I have to hold?

Minimum 1 year (cannot redeem at all). 1 to 5 years: lose the most recent 3 months of interest if you redeem. 5+ years: no penalty.

How is the composite rate calculated?

Composite = fixed + 2 x semi_annual_inflation + (fixed x semi_annual_inflation). The fixed rate stays for the bond's life; the inflation portion resets every 6 months.

When are new rates announced?

First business day of May (covering May-Oct) and November (covering Nov-Apr). Your bond gets the rate active when you buy it for the first 6 months.

Are I Bonds taxable?

Federal: yes, on accrued interest. State / local: never. Interest can be deferred until redemption (up to 30 years) or reported annually.

Is the education tax exclusion real?

Yes. If you redeem I Bonds in the same year you pay qualified higher education expenses for yourself or dependent, the interest can be tax-free (subject to MAGI phaseout).

How are TIPS different?

TIPS are tradable Treasury securities (5, 10, 30-yr maturities). Pay a real coupon plus inflation accrual to principal. State tax exempt. Inflation accrual is federally taxable annually unless held in IRA - 'phantom income'.