1. What Is A Savings Bond Calculator?

The Savings Bond Calculator is a US Treasury tool used for calculating the future value of Series EE and I savings bonds. It helps investors determine the current worth of their bonds based on the issue price, interest rate, and time held.

2. How Does The Calculator Work?

The calculator uses the savings bond formula:

Where:

• \( FV \) — Future value or bond value (USD)
• \( P \) — Issue price or principal amount (USD)
• \( r \) — Annual interest rate (decimal)
• \( t \) — Time since issue in years (years)

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

3. Importance Of Bond Value Calculation

Details: Accurate bond valuation is crucial for investment planning, tax reporting, and understanding the growth of savings bonds over time. It helps investors make informed decisions about holding or redeeming bonds.

4. Using The Calculator

Tips: Enter the original issue price in USD, annual interest rate as a decimal (e.g., 0.025 for 2.5%), and time since issue in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What types of savings bonds does this calculator work for?
A: This calculator is designed for Series EE and Series I US savings bonds, which use semi-annual compounding.

Q2: How often do savings bonds compound interest?
A: US savings bonds compound interest semi-annually (twice per year), which is reflected in the formula.

Q3: Are savings bonds taxable?
A: Yes, interest earned on savings bonds is subject to federal income tax, but exempt from state and local taxes.

Q4: What's the minimum investment for savings bonds?
A: Series EE and I bonds can be purchased for as little as $25, making them accessible to most investors.

Q5: How long do savings bonds take to mature?
A: Series EE bonds mature in 30 years, while Series I bonds earn interest for 30 years but can be held longer.