1. What is the I Bonds Calculator?

The I Bonds Calculator calculates the current value of Series I savings bonds based on purchase amount, fixed annual rate, semiannual inflation rate, and years held. I Bonds are U.S. government savings bonds that earn interest based on both a fixed rate and an inflation rate.

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 the combined effect of fixed interest and inflation adjustments, compounded semiannually over the holding period.

3. Importance of I Bonds Calculation

Details: Accurate I Bonds valuation helps investors understand the real return on their investment, accounting for inflation protection and fixed interest components.

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 valid positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are I Bonds?
A: I Bonds are U.S. Treasury savings bonds that offer inflation protection. They earn a combination of a fixed rate and an inflation-adjusted rate.

Q2: How often are inflation rates adjusted?
A: Inflation rates for I Bonds are adjusted semiannually, in May and November, based on the Consumer Price Index.

Q3: What is the minimum holding period for I Bonds?
A: I Bonds must be held for at least 1 year. If redeemed within 5 years, you lose the last 3 months of interest.

Q4: Are there purchase limits for I Bonds?
A: Yes, the annual purchase limit is $10,000 per Social Security number for electronic bonds, plus $5,000 in paper bonds via tax refund.

Q5: How are I Bonds taxed?
A: I Bonds are exempt from state and local taxes, but federal income tax applies. Tax can be deferred until redemption or maturity.