How do I calculate interest on my I Bonds?


Q. I purchased an I Bond for $10,000 on Dec. 23, 2021, when the interest was 7.12%. Today, it is showing $236 in interest. However, I thought that at that interest rate, it should be $10,000 x 0.0712 x 6 months/12 months = $356 since it has been six months. What is wrong with my calculation?
— Perplexed

A. I Bonds are very popular these days.

They pay a higher interest rate because there is an inflation component, and we all know how high inflation is.

Before we get to the calculation, let’s go over the rules and how the U.S. Treasury calculator interest.

For starters, you are only allowed to redeem an I Bond after it is 12 months old, said Jim McCarthy, a certified financial planner with Directional Wealth Management in Rockaway.

If you redeem before five years of ownership, you will lose the last three months of interest, he said.

“You collect interest on the purchase month even if you bought at the end of the month, but you do not collect interest on the month that you redeem,” he said. “The Treasury website only shows the amount of interest that you are eligible to redeem.”

Given these rules, for the month of July and the three months prior — June, May and April — the interest earned is not available, McCarthy said.

“You are only eligible for the months of December, January, February and March which gives us a total of $237.33 — $59.33 for each month,” he said. “The Treasury rounds down so you effectively get $59 of earned interest, which is why you see $236 on your account.”

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This story was originally published on Aug. 2, 2022. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.