1. What is the EE Savings Bond Formula?

The EE Savings Bond formula calculates the current value of US Series EE savings bonds based on the purchase amount, annual interest rate, and number of years held. These bonds are a popular low-risk investment option backed by the US government.

2. How Does the Calculator Work?

The calculator uses the EE Savings Bond formula:

Where:

• \( V \) — Current value of the bond (USD)
• \( P \) — Purchase amount (USD)
• \( rate \) — Annual interest rate (decimal)
• \( y \) — Number of years held

Explanation: The formula uses semi-annual compounding, where the annual interest rate is divided by 2 and applied twice per year over the total holding period.

3. Importance of EE Savings Bond Calculation

Details: Accurate calculation helps investors understand the growth of their savings bonds over time, plan for future financial needs, and compare investment returns with other options.

4. Using the Calculator

Tips: Enter the original purchase amount in USD, the annual interest rate as a decimal (e.g., 0.025 for 2.5%), and the number of years held. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What are EE Savings Bonds?
A: EE Savings Bonds are US government savings bonds that earn interest for up to 30 years. They are considered a safe, low-risk investment.

Q2: How often is interest compounded on EE Bonds?
A: Interest on EE Savings Bonds is compounded semiannually, meaning it's calculated and added to the principal twice per year.

Q3: What is the minimum investment for EE Bonds?
A: The minimum purchase amount for EE Savings Bonds is $25 when buying electronically through TreasuryDirect.

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

Q5: Can EE Bonds be redeemed before maturity?
A: EE Bonds must be held for at least one year, and if redeemed within the first 5 years, you'll forfeit the last 3 months of interest.