Rex says
Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.
Try a scenario
Click to load — tweak from there.Inputs
Result
I bond advantage over CD (after tax)
-$41
I bond value after tax
$11,687
CD value after tax
$11,728
I bond composite rate used
4.30%
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How to use this
- 1Enter amount to invest ($).
- 2Enter i bond fixed rate (%).
- 3Enter expected annual inflation component (%).
- 4Enter cd annual percentage yield (%).
- 5Enter holding period (years).
- 6Enter combined marginal tax rate (%).
- 7Read your i bond advantage over cd (after tax) on the right — it updates as you type.
- 8Hit Share to keep the scenario or send it to someone.
About this calculator
I bonds pay a fixed rate for the bond's 30-year life plus a variable rate that resets every six months based on inflation (CPI-U), so their yield rises when inflation runs hot and falls when it cools. CDs pay a locked-in nominal rate regardless of what inflation does, and unlike I bonds, CD interest is taxable annually at both federal and state levels the year it's earned (I bond interest is federal-only and can be deferred until redemption or maturity). This calculator estimates total return for both over a chosen holding period, applying your tax rate correctly to each (I bond interest deferred and taxed once at the end versus CD interest taxed every year), and factors in the I bond's 3-month interest penalty if redeemed before 5 years, so you can see which actually leaves more in your pocket for your specific horizon and tax situation.
Worked example
Using the values the calculator loads with:
Inputs
- Amount to invest: 10000 $
- I bond fixed rate: 1.3 %
- Expected annual inflation component: 3 %
- CD annual percentage yield: 4.5 %
- Holding period: 5 years
- Combined marginal tax rate: 28 %
Results
- I bond advantage over CD (after tax): -$41
- I bond value after tax: $11,687
- CD value after tax: $11,728
- I bond composite rate used: 4.30%
What each field means
Inputs
- Amount to invest ($)
- The amount to invest used in the calculation, measured in $. Starts at 10000 $ so you have a working example on load.
- I bond fixed rate (%)
- The i bond fixed rate used in the calculation, measured in %. Starts at 1.3 % so you have a working example on load. Accepted range: 0–5 %.
- Expected annual inflation component (%)
- The expected annual inflation component used in the calculation, measured in %. Starts at 3 % so you have a working example on load. Accepted range: 0–10 %.
- CD annual percentage yield (%)
- The cd annual percentage yield used in the calculation, measured in %. Starts at 4.5 % so you have a working example on load. Accepted range: 0–8 %.
- Holding period (years)
- The holding period used in the calculation, measured in years. Starts at 5 years so you have a working example on load. Accepted range: 1–30 years.
- Combined marginal tax rate (%)
- The combined marginal tax rate used in the calculation, measured in %. Starts at 28 % so you have a working example on load. Accepted range: 0–50 %.
Results
- I bond advantage over CD (after tax)
- Returned as a money amount in US dollars and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- I bond value after tax
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- CD value after tax
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- I bond composite rate used
- Returned as a percentage. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
FAQ
Why is I bond interest often better after tax than a CD's headline rate suggests?
I bond interest is exempt from state and local income tax and federal tax can be deferred for up to 30 years until redemption, letting the full pretax amount compound in the meantime. CD interest is taxed as ordinary income every single year it's credited, even if you never touch the money, which drags down the effective compounding rate year over year.
What's the catch with I bonds?
You can't redeem an I bond in the first 12 months at all, and redeeming between 1 and 5 years forfeits the last 3 months of interest as a penalty. There's also a $10,000 per person per calendar year purchase limit (plus up to $5,000 more via tax refund), so I bonds don't work for large lump sums.
Does the I bond rate ever go negative?
No. The Treasury Direct formula floors the combined rate at the fixed rate even if the inflation component goes negative, meaning your I bond's value never declines in nominal terms, unlike some other inflation-linked instruments.
Which is simpler for a short-term emergency fund?
A CD or high-yield savings account, because of I bonds' 1-year lockup and 5-year penalty window. I bonds work better as a multi-year inflation hedge for money you're confident you won't need before year five.
Accuracy and limitations
- Results are estimates before tax, fees, and inflation unless an input explicitly covers them.
- Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.
- This is educational maths, not financial advice. Check anything contractual with the lender or your accountant.
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Cite this calculator
Writing about this topic? Grab a citation — every link helps keep these tools free.
RevenueLab. (2026). I Bond vs. CD Calculator. Retrieved from https://www.revenuelab.fyi/toolbox/ibond-vs-cd
<p>Source: <a href="https://www.revenuelab.fyi/toolbox/ibond-vs-cd" target="_blank" rel="noopener">I Bond vs. CD Calculator — RevenueLab</a> (2026).</p>
Source: [I Bond vs. CD Calculator — RevenueLab](https://www.revenuelab.fyi/toolbox/ibond-vs-cd) (2026).