How the I Bond Composite Rate Is Calculated
The composite rate combines a fixed rate set at issue with an inflation rate reset every six months. Treasury announces both each May 1 and November 1.
An I bond’s rate is a composite: the fixed rate plus twice the semiannual inflation rate, plus their cross-product1. The fixed part is set in the issue month and never changes; the inflation part resets every six months.
The current I bond rate page shows today’s three numbers, and the I bond calculator applies them to one bond. This page explains where each number comes from.
The formula, with today’s numbers
TreasuryDirect publishes the calculation as: “Composite rate formula: [Fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)]”.
For the period that began May 1, 2026 the fixed rate is 0.90%2 and the semiannual inflation rate is 1.67%3. Substituting gives 0.902 + 2 × 1.673 + (0.902 × 1.673 ÷ 100) = 4.255, which rounds to 4.26%4. Treasury’s own published composite for that period is the same figure.
The doubling of the inflation rate is not a bonus. The inflation figure is a semiannual rate covering six months, so it is doubled to state the composite as an annual rate. The third term is the small cross-product of the two rates.
Where each part comes from
| Part of the rate | How it is set | How often it changes |
|---|---|---|
| Fixed rate | Announced by Treasury; no formula is published | Announced twice a year, but frozen for the life of a bond at the rate in effect in its issue month |
| Semiannual inflation rate | Derived from the non-seasonally adjusted CPI-U for all items, including food and energy | Every six months |
| Composite rate | The formula above, rounded to two decimals | Every six months for each bond |
Treasury states the announcement rhythm as “We announce the fixed rate every May 1 and November 1.” It publishes the fixed rate as a decision, not as the output of a published formula, which is why the fixed rate cannot be worked out in advance from any public series.
The inflation component can be traced. It is “based on changes in the non-seasonally adjusted Consumer Price Index for all Urban Consumers (CPI-U) for all items, including food and energy.”
The zero floor
A negative inflation rate can pull the composite down, but not below zero. Treasury’s wording is: “However, if the inflation rate is so negative that it would pull the combined rate below zero, we don’t let that happen. We stop at zero.”
This has happened. For the six-month period beginning May 2009 the semiannual inflation rate was −2.78% and the composite rate was 0.00%. The same thing happened for the period beginning May 2015, when the semiannual inflation rate was −0.80%. In both periods bonds kept their accrued value and earned nothing for six months.
The floor applies to the composite, not to the fixed rate. A bond with a high fixed rate absorbs more deflation before it reaches zero.
Why your bond’s rate is not the headline rate
Two bonds bought in different months can earn different composite rates in the same six months, because each keeps the fixed rate from its own issue month.
A bond issued between May and October 2025 carries a fixed rate of 1.10%5. In the current period that bond earns 4.46%6, not the headline 4.26%4. The I bond rate history lists the fixed rate attached to every issue window since 1998.
Why the change month differs from May and November
Each bond runs its own six-month clock from its issue month. TreasuryDirect states it as: “Although we announce the new rates in May and November, the date when the rate changes for your bond is every 6 months from the issue date of your bond.”
A bond issued in August therefore changes rate on February 1 and August 1. It picks up the inflation rate announced the previous November and the following May, one period late relative to the headline.
How is the I bond composite rate calculated?
The composite rate is fixed rate + 2 × semiannual inflation + (fixed × semiannual inflation ÷ 100), floored at 0%1, and the result is rounded to two decimal places. The fixed rate comes from the bond’s issue month; the semiannual inflation rate comes from the period the bond is currently in.
Why is my I bond’s rate different from the headline rate?
Because the fixed part of your rate was locked in the month your bond was issued and never changes. The headline rate uses the fixed rate for bonds issued now, so any bond with a different fixed rate earns a different composite.
Why does my rate change in a month that is not May or November?
Because each bond’s six-month rate period runs from its own issue month. Only bonds issued in May or November change rate in May and November.
Can an I bond rate go below zero?
No. Treasury floors the composite rate at zero, so a bond can earn nothing for a six-month period but cannot lose accrued value to a negative rate.
How is the inflation part of the rate measured?
From the non-seasonally adjusted CPI-U for all items, including food and energy. Treasury converts the change between two reference months into the semiannual inflation rate it publishes.
When does the fixed rate change?
Treasury announces a fixed rate each May 1 and November 1; the next announcement is November 1, 20267 (a Sunday; Treasury usually posts on the next business day). A change affects only bonds issued from that date; existing bonds keep the fixed rate they were issued with.
Open the I bonds calculator →Sources
Information, not advice. This is the reading version; the interactive calculator and the full page are at https://thresholds.pages.dev/i-bonds/how-the-rate-is-set/.