1. What is US Treasury Savings Bond?

US Treasury Savings Bonds are government-backed debt securities that pay interest over time. They are considered one of the safest investments available, backed by the full faith and credit of the U.S. government.

2. How Does the Calculator Work?

The calculator uses the US Treasury savings bond formula:

Where:

• \( FV \) — Future value of the bond (USD)
• \( P \) — Initial issue price (USD)
• \( r \) — Annual interest rate (decimal)
• \( t \) — Time since issue (years)

Explanation: The formula calculates compound interest with semi-annual compounding, which is standard for US Treasury savings bonds.

3. Importance of Bond Valuation

Details: Accurate bond valuation helps investors understand the current worth of their investments, plan for future financial goals, and make informed decisions about buying, holding, or selling bonds.

4. Using the Calculator

Tips: Enter the bond's issue price in USD, annual interest rate as a decimal (e.g., 0.05 for 5%), and time since issue in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What types of US Treasury bonds use this formula?
A: This formula applies to Series EE and Series I savings bonds, which feature semi-annual compounding interest.

Q2: How often is interest compounded on Treasury bonds?
A: Interest on US Treasury savings bonds is compounded semi-annually, meaning twice per year.

Q3: Are Treasury bonds taxable?
A: Interest earned on Treasury bonds is subject to federal income tax but exempt from state and local taxes.

Q4: What is the minimum investment for Treasury bonds?
A: The minimum purchase amount for electronic Treasury bonds is $25, while paper bonds have a $50 minimum.

Q5: Where can I purchase US Treasury bonds?
A: Treasury bonds can be purchased directly from the Treasury Department through TreasuryDirect.gov, banks, or financial institutions.