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I Bond Composite Rate Formula:
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The I Bond Fixed Rate May 2022 Calculator calculates the composite rate for Series I savings bonds issued in May 2022. The composite rate combines the fixed rate with the inflation rate to determine the total return on the bond.
The calculator uses the composite rate formula:
Where:
Explanation: The formula combines the fixed component with twice the inflation rate plus the product of fixed and inflation rates to calculate the total composite rate.
Details: The composite rate determines the actual return investors receive on Series I bonds. It ensures that the bond's return keeps pace with inflation while providing a fixed return component.
Tips: Enter the fixed rate for May 2022 and the current inflation rate as decimals (e.g., 0.025 for 2.5%). Both values must be non-negative.
Q1: What are Series I bonds?
A: Series I savings bonds are U.S. government savings bonds that earn interest based on a combination of a fixed rate and an inflation rate.
Q2: How often is the composite rate calculated?
A: The composite rate is calculated every six months (May and November) based on the current inflation rate.
Q3: What was the actual fixed rate for May 2022?
A: The fixed rate for I bonds issued in May 2022 was announced by the Treasury Department and varies for different issuance periods.
Q4: Can the composite rate be negative?
A: No, the composite rate has a floor of 0%, meaning I bonds will never lose value due to deflation.
Q5: How long do I need to hold I bonds?
A: I bonds must be held for at least one year, and if redeemed within five years, you forfeit the last three months of interest.