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US Treasury EE Bond Formula:
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The US Treasury EE Bond Calculator estimates the future value of Series EE savings bonds based on the issue price, annual interest rate, and time held. EE bonds are low-risk savings instruments issued by the U.S. government that earn interest for up to 30 years.
The calculator uses the EE Bond formula:
Where:
Explanation: The formula calculates compound interest with semi-annual compounding, which is how EE bonds accrue value. The interest is added to the bond's value twice per year.
Details: Calculating the future value of EE bonds helps investors understand their investment growth, plan for financial goals, and compare returns with other savings options. EE bonds offer a safe, government-backed investment with tax advantages for education expenses.
Tips: Enter the original issue price in USD, the annual interest rate as a decimal (e.g., 0.025 for 2.5%), and the time held in years. All values must be positive numbers.
Q1: What are the current interest rates for EE bonds?
A: Interest rates for new EE bonds are set each May and November. As of 2023, EE bonds issued from May 2023 through October 2023 earn a fixed rate of 2.50%.
Q2: How long do EE bonds earn interest?
A: EE bonds earn interest for 30 years. They are guaranteed to double in value in 20 years, after which they continue earning interest for another 10 years.
Q3: Are EE bonds taxable?
A: Yes, but federal income tax may be deferred until redemption, and EE bonds may be completely or partially excluded from taxation when used for qualified education expenses.
Q4: Can I redeem my EE bond before maturity?
A: EE bonds must be held for at least one year. If redeemed before 5 years, you'll forfeit the last 3 months of interest. After 5 years, there's no penalty.
Q5: Where can I purchase EE bonds?
A: EE bonds can be purchased electronically through TreasuryDirect.gov. Paper EE bonds are no longer sold through financial institutions as of 2012.