CFR > Title 31 - Money and Finance: Treasury > SUBTITLE B—Regulations Relating to Money and Finance > CHAPTER II—FISCAL SERVICE, DEPARTMENT OF THE TREASURY (parts 200 to 391) > SUBCHAPTER B—BUREAU OF THE PUBLIC DEBT (parts 306 to 391) > PART 359—OFFERING OF UNITED STATES SAVINGS BONDS, SERIES I > SUBPART A—General Information (§359.0 to §359.20-359.24) > 359.14—How are composite rates determined?

359.14—How are composite rates determined?

Composite rates are set according to the following formula (See appendix A to part 359 for examples of calculations involving composite interest rates.):

Code of Federal Regulations

Composite rate = {(Fixed rate ÷ 2) Semiannual inflation rate [Semiannual inflation rate × (Fixed rate ÷ 2)]} × 2. 2

Code of Federal Regulations

Footnote(s): 2 Example for I bonds issued May 2002-October 2002: Fixed rate = 2.00% Inflation rate = 0.28% Composite rate = [0.0200 ÷ 2 0.0028 (0.0028 × 0.0200 ÷ 2)] ×2 Composite rate = [0.0100 0.0028 0.000028] ×2 Composite rate = 0.012828 × 2 Composite rate = 0.025656 Composite rate = 0.0257 (rounded) Composite rate = 2.57% (rounded)