1. What is the I Bond Calculator?

The I Bond Calculator estimates the current value of Series I savings bonds using TreasuryDirect's official calculation method. It accounts for both fixed and inflation-based returns over the holding period.

2. How Does the Calculator Work?

The calculator uses the TreasuryDirect formula:

Where:

• \( V \) — Current value of the bond (USD)
• \( P \) — Original purchase amount (USD)
• \( fixed \) — Fixed annual interest rate (decimal)
• \( inflation \) — Semiannual inflation rate (decimal)
• \( y \) — Number of years held

Explanation: The formula combines fixed and inflation components, compounding semiannually to reflect the bond's actual growth pattern.

3. Importance of I Bond Valuation

Details: Accurate I Bond valuation helps investors track their inflation-protected savings, plan for future expenses, and make informed investment decisions.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What are Series I bonds?
A: Series I savings bonds are U.S. government savings bonds that earn interest based on both a fixed rate and an inflation rate.

Q2: How often do inflation rates change?
A: Inflation rates for I bonds are adjusted every six months (May and November) based on the Consumer Price Index.

Q3: What is the minimum holding period?
A: I bonds must be held for at least one year, and there's a penalty of three months' interest if redeemed before five years.

Q4: Are there purchase limits?
A: Yes, individuals can purchase up to $15,000 in electronic I bonds per year through TreasuryDirect.

Q5: How accurate is this calculator?
A: This calculator uses TreasuryDirect's official methodology, providing results consistent with their online calculator.