1. What is the US Treasury Savings Bond Calculator?

The US Treasury Savings Bond Calculator estimates the current value of Treasury savings bonds based on purchase amount, annual interest rate, and years held. It uses the standard compounding formula for semi-annual interest payments.

2. How Does the Calculator Work?

The calculator uses the US Treasury bond formula:

Where:

• \( V \) — Current value (USD)
• \( P \) — Purchase amount (USD)
• \( rate \) — Annual interest rate (decimal)
• \( y \) — Years held (years)

Explanation: The formula accounts for semi-annual compounding, where interest is applied twice per year, making it more accurate than simple annual compounding for Treasury bonds.

3. Importance of Bond Value Calculation

Details: Accurate bond valuation helps investors track investment growth, plan financial goals, and make informed decisions about holding or redeeming Treasury bonds.

4. Using the Calculator

Tips: Enter purchase amount in USD, annual interest rate as a decimal (e.g., 0.05 for 5%), and years held. All values must be valid (purchase amount > 0, rate ≥ 0, years ≥ 0).

5. Frequently Asked Questions (FAQ)

Q1: What types of Treasury bonds use this formula?
A: This formula applies to Series EE and Series I savings bonds that feature semi-annual compounding interest.

Q2: How often is interest compounded on Treasury bonds?
A: US Treasury savings bonds typically compound interest semi-annually (twice per year).

Q3: What is the minimum investment for Treasury bonds?
A: The minimum purchase amount for electronic Treasury bonds is $25, with no maximum limit for individual investors.

Q4: Are Treasury bonds taxable?
A: Interest earned on Treasury bonds is subject to federal income tax but exempt from state and local taxes.

Q5: What happens if I redeem bonds before maturity?
A: Early redemption may result in lost interest, especially if redeemed within the first 5 years for most Treasury bonds.