1. What is the Series EE Savings Bond?

Series EE Savings Bonds are U.S. government savings bonds that earn interest monthly and compound semiannually. They are guaranteed to double in value in 20 years and continue to earn interest for up to 30 years.

2. How Does the Calculator Work?

The calculator uses the Series EE bond valuation formula:

Where:

• \( FV \) — Future Value (bond value in USD)
• \( P \) — Issue Price (initial purchase price in USD)
• \( r \) — Annual Interest Rate (expressed as decimal)
• \( t \) — Time Since Issue (in years)

Explanation: The formula calculates the compound interest on the bond with semiannual compounding, which is standard for Series EE bonds.

3. Importance of Bond Valuation

Details: Accurate bond valuation helps investors understand the current worth of their savings bonds, plan for future financial needs, and make informed decisions about holding or redeeming bonds.

4. Using the Calculator

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 since issue in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the minimum investment for Series EE bonds?
A: The minimum purchase amount for Series EE bonds is $25 when buying electronically through TreasuryDirect.

Q2: How long do Series EE bonds earn interest?
A: Series EE bonds earn interest for 30 years. They are guaranteed to double in value in 20 years.

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

Q4: Can I redeem my Series EE bond before maturity?
A: Yes, but you must hold the bond for at least one year. If redeemed before 5 years, you'll forfeit the last 3 months of interest.

Q5: Where can I purchase Series EE bonds?
A: Series EE bonds can be purchased electronically through TreasuryDirect.gov. Paper bonds are no longer sold through financial institutions.