Iowa Post Judgment Interest Rate: How to Calculate What You're Owed

How Iowa Sets the Post-Judgment Interest Rate

Iowa does not use a fixed interest rate on court judgments. Under Iowa Code § 535.3, the post-judgment interest rate is the 1-year Treasury constant maturity rate published by the Federal Reserve plus two percentage points, unless a contract fixes the rate. The Iowa Judicial Branch posts the applicable rates by Federal Reserve auction date.

The rate changes as Treasury yields change. The rate applies to money due on the judgment as of the judgment date; for tort damages, interest begins from commencement of the action under Iowa Code § 668.13.

The Simple Interest Formula

Post-judgment interest in Iowa is simple interest, not compound. The formula is straightforward:

Interest = Principal × Rate × Time

Where principal is the outstanding judgment balance (not the original amount if partial payments have been made), rate is the annual percentage expressed as a decimal, and time is the elapsed period expressed as a fraction of a year (days ÷ 365).

For a $4,000 judgment at 6% annual interest with no payments made over 180 days:

$4,000 × 0.06 × (180 ÷ 365) = $118.36 in accrued interest.

Payment Application Order Matters

When you receive partial payments through garnishment or voluntary installments, the law dictates the order in which those payments are applied:

1. Court costs and sheriff execution fees are satisfied first
2. Accrued post-judgment interest is paid next
3. Principal judgment balance gets whatever remains

This sequence matters more than most creditors realize. If you accept a $500 payment and apply it all to principal, you are shorting yourself on the interest that has already accrued. Maintaining a proper ledger that tracks each payment in the correct statutory order prevents you from inadvertently forgiving interest you are legally entitled to collect.

Tracking Interest on Partial Payments

The calculation gets more involved when payments arrive at irregular intervals. Each payment resets the principal on which future interest accrues. A running ledger might look like this:

• Judgment entered January 15, 2025 for $5,000 principal + $115 court costs at 6.19% interest (the January 9, 2025 Treasury rate of 4.19% plus 2%)
• By July 15, 2025 (181 days), interest has accrued to $153.48 on the $5,000 principal
• A $1,000 garnishment arrives July 16, 2025 — first $115 clears court costs, then $153.48 clears interest, leaving $731.52 applied to principal
• New principal balance: $4,268.48
• Interest now accrues on $4,268.48, not on the original $5,000

Without this running calculation, creditors commonly accept payments against the stated judgment amount and lose hundreds of dollars in statutory interest over the life of a multi-year collection.

Where to Find the Current Rate

The Iowa Judicial Branch publishes the post-judgment interest table on its website, listing rates by auction date. Check this table to confirm the rate applicable to your judgment date.

The rate does not change mid-judgment. Once your judgment is entered at a given year's rate, that rate applies for the life of the judgment (up to 20 years under Iowa Code § 614.1). You do not re-calculate each January at the new year's rate — the rate is locked at entry.

Interest Continues During the Appeal Window

A common question: does interest accrue during the 20-day appeal period under Iowa Code § 631.13? Yes. Interest begins running from the statutory trigger date (filing or judgment entry as applicable), and the appeal window does not pause it. Even if the debtor posts an appeal bond that stays execution, the underlying interest clock keeps ticking.

Why This Matters for Small Claims Collection

On a $6,500 judgment (Iowa's small claims cap), post-judgment interest at even a moderate 5–6% rate adds over $300 per year. Over several years of collection — common when Iowa's annual wage garnishment caps limit how fast you can collect — interest can add materially to what the debtor ultimately owes.

Our Iowa Judgment Collection Guide includes a payment accounting ledger that applies the statutory interest formula automatically as you log garnishment receipts and voluntary payments, so you always know the true outstanding balance.

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