Series I bond
By Jude Wallis
A Series I bond is a nonmarketable United States savings bond whose composite rate combines a fixed rate set at purchase with a semiannual inflation rate based on CPI-U.
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The composite identity is the fixed rate plus twice the semiannual inflation rate plus their product, floored at zero. Interest accrues monthly and is added to value every six months.
An I bond does not trade at a real yield. It is redeemed with the Treasury under holding rules, including a first-year lock and an early-redemption interest penalty before five years.
How Series I bonds work is the explainer. The I bond calculator runs the composite. TIPS are the marketable inflation-linked cousin.