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US Savings Bond Formula:
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The US Savings Bond formula calculates the future value of a savings bond based on its issue price, annual interest rate, and time since issue. It uses semi-annual compounding to determine the current value of the bond.
The calculator uses the US Savings Bond formula:
Where:
Explanation: The formula accounts for semi-annual compounding, where interest is calculated twice per year and added to the principal.
Details: Calculating the current value of savings bonds is essential for financial planning, investment tracking, and understanding the growth of your savings over time.
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 valid (price > 0, rate ≥ 0, time ≥ 0).
Q1: What types of bonds use this calculation?
A: This formula is typically used for Series EE and Series I US Savings Bonds that feature semi-annual compounding.
Q2: How often does interest compound on savings bonds?
A: Most US Savings Bonds compound interest semi-annually, meaning interest is calculated and added to the principal twice per year.
Q3: Are there minimum holding periods for savings bonds?
A: Yes, most savings bonds have a minimum holding period of one year, and redeeming them before five years typically results in losing the last three months of interest.
Q4: Do savings bonds have maturity dates?
A: Yes, most US Savings Bonds stop earning interest after 30 years, which is considered their final maturity date.
Q5: Where can I find the interest rate for my bond?
A: Current and historical interest rates for US Savings Bonds are published on the TreasuryDirect website maintained by the US Department of the Treasury.