I Bond Calculator

I Bond Value Formula:

\[ V = P \times (1 + \frac{\text{fixed} + 2 \times \text{inflation}}{2})^{2 \times y} \]

Purchase Amount (P):

USD

Fixed Annual Rate (fixed):

decimal

Semiannual Inflation Rate (inflation):

decimal

Years Held (y):

years

Current Value (V):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the I Bond Calculator?

The I Bond Calculator estimates the current value of US Series I savings bonds by accounting for both fixed interest rates and inflation adjustments. I Bonds are government savings bonds designed to protect against inflation while providing a guaranteed return.

2. How Does the Calculator Work?

The calculator uses the I Bond value formula:

\[ V = P \times (1 + \frac{\text{fixed} + 2 \times \text{inflation}}{2})^{2 \times y} \]

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 combines the fixed rate with twice the semiannual inflation rate, compounds semiannually (hence the 2*y exponent), and calculates the total growth over the holding period.

3. Importance of I Bond Calculation

Details: Accurate I Bond valuation helps investors understand the real return on their investment, accounting for inflation protection features that make I Bonds unique among savings instruments.

4. Using the Calculator

Tips: Enter the original purchase amount in USD, the fixed annual rate as a decimal (e.g., 0.035 for 3.5%), the semiannual inflation rate as a decimal, and the number of years held. All values must be positive.

5. Frequently Asked Questions (FAQ)

Q1: What are I Bonds?
A: I Bonds are US government savings bonds that earn interest based on both a fixed rate and an inflation rate that adjusts every six months.

Q2: How often do I Bond rates change?
A: The fixed rate remains constant for the life of the bond, while the inflation rate adjusts every six months (May and November).

Q3: What are the current I Bond rates?
A: Current rates are announced by the Treasury Department each May and November. Check TreasuryDirect.gov for the latest rates.

Q4: Are there penalties for early redemption?
A: I Bonds cannot be redeemed within the first year, and redeeming within 5 years forfeits the last 3 months of interest.

Q5: What is the maximum I Bond purchase amount?
A: The annual purchase limit is $10,000 per Social Security number for electronic bonds, plus up to $5,000 in paper bonds via tax refund.