1. What is the I Bonds Calculator?

The I Bonds Calculator estimates the current value of Series I Savings Bonds using the Treasury Direct formula. It calculates the compounded value based on fixed and inflation rates over the holding period.

2. How Does the Calculator Work?

The calculator uses the I Bonds value formula:

Where:

• \( V \) — Current value (USD)
• \( P \) — Purchase amount (USD)
• \( \text{fixed} \) — Fixed annual rate (decimal)
• \( \text{inflation} \) — Semiannual inflation rate (decimal)
• \( y \) — Years held (years)

Explanation: The formula accounts for both the fixed rate and semiannual inflation adjustments, compounded semiannually over the holding period.

3. Importance of I Bonds Calculation

Details: Accurate I Bonds valuation helps investors track their inflation-protected savings growth and make informed decisions about bond redemption or continued holding.

4. Using the Calculator

Tips: Enter purchase amount in USD, fixed annual rate and inflation rate as decimals (e.g., 0.025 for 2.5%), and years held. All values must be positive.

5. Frequently Asked Questions (FAQ)

Q1: What are I Bonds?
A: I Bonds are U.S. savings bonds that earn interest based on both a fixed rate and an inflation rate, providing protection against inflation.

Q2: How often are rates updated?
A: Fixed rates are set at purchase, while inflation rates are adjusted every six months based on CPI-U changes.

Q3: What is the minimum holding period?
A: I Bonds must be held for at least one year, and redeeming within five years incurs a three-month interest penalty.

Q4: Where can I find current rates?
A: Current rates are published on TreasuryDirect.gov and updated each May and November.

Q5: Are I Bonds taxable?
A: I Bond interest is subject to federal income tax but exempt from state and local income taxes.