31 CFR § 359.14 - How are composite rates determined?

---
identifier: "/us/cfr/t31/s359.14"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "31 CFR § 359.14 - How are composite rates determined?"
title_number: 31
title_name: "Money and Finance: Treasury"
section_number: "359.14"
section_name: "How are composite rates determined?"
chapter_name: "FISCAL SERVICE, DEPARTMENT OF THE TREASURY"
subchapter_number: "A"
subchapter_name: "BUREAU OF THE FISCAL SERVICE"
part_number: "359"
part_name: "OFFERING OF UNITED STATES SAVINGS BONDS, SERIES I"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
authority: "5 U.S.C. 301; 12 U.S.C. 391; 31 U.S.C. 3105."
regulatory_source: "67 FR 64278, Oct. 17, 2002, unless otherwise noted."
cfr_part: "359"
---


# 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.):

Composite rate = {(Fixed rate ÷ 2) + Semiannual inflation rate + [Semiannual inflation rate × (Fixed rate ÷ 2)]} × 2. 
<sup>2</sup>
[^]

<sup>2</sup> 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)