Series I Bond savings

I bought an I bond Dec 28 2021 for $10000 , shows 7.12 percent interest but just got my first 6 month s value noticed and current value is only $10,116 . I thought it should be at least $10,350 ?

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You haven’t had it for 6 months, so it won’t be that much. Plus it appears they’re quoting the value after the penalty for early withdrawal.

I’m not sure exactly how they calculate it or round the numbers, and it’s sort of moot for now anyway because you cannot withdraw it in the first year. However, here’s a guess at how that number was derived:

As I understand it, interest accrues monthly from the first of the month you buy it, and compounds semi-annually. From the first of December 2021 to the end of April 2022 is 5 months, so there’s no compounding yet.

In the first 6 months you’d be earning 1/12 of the yearly rate per month on the initial $10K.

So the interest might be 10,000 x 7.12%/12 x 5 = $296.67
The 3 month penalty might be 10,000 x 7.12%/12 x 3 = $180.11
The total value of $10,296 - 180 = $10,116.


Thanks I was not thinking it had not been 6 months yet just seen the first statement posted and thought it had been 6 months. . And did not realize the penalty was already calculated.

Thanks for the quick response


Is the rate variable for series I? If so, how often does the rate change?

It is variable it changes twice a year I believe. Don’t quote me on that. It all depends on the CPI but it can never go below 0% which is actually why I bought them originally we were afraid of going Sub-Zero a few years ago. Now look!


Here is the treasury direct explanation about How I-bonds work

How do I bonds earn interest?

An I bond earns interest monthly from the first day of the month in the issue date. The interest accrues (is added to the bond) until the bond reaches 30 years or you cash the bond, whichever comes first.

  • The interest is compounded semiannually . Every six months from the bond’s issue date, interest the bond earned in the six previous months is added to the bond’s principal value, creating a new principal value. Interest is then earned on the new principal.
  • You can cash the bond after 12 months. However, if you cash the bond before it is five years old, you lose the last three months of interest. Note: If you use TreasuryDirect or the Savings Bond Calculator to find the value of a bond less than five years old, the value displayed reflects the three-month penalty; that is, the amount of the penalty has been subtracted already.

The rate changes every 6 months, tracking with inflation what can be a somewhat complicated formula, which also depends on a table of when the bonds were bought. Here’s more about how the rates are calculated:

Individual - Series I Savings Bonds Rates & Terms: Calculating Interest Rates (

Current I-bonds have are paying at least 7.12% and older ones up to about 13%. New purchases are now paying 9.62% for the next 6 months. Chances are it will that much or more for the next 6 months. At today’s rates, even in the unlikely event that inflation were to be less than zero, you still have all your principal plus all the interest that accrued during the first periods when inflation and return rates were high. I think it’s unlikely that you can do better in any other guaranteed no loss and safe investment that you can hold for at least a year before you need it – even after paying the penalty for early withdrawal in the first 5 years. The net return is even better in states that have an income tax, since US bonds are exempt from state tax.