I Bond Savings Bond Calculator

I Bond Value Formula:

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

Purchase Amount (P):

USD

Fixed Annual Rate (fixed):

decimal

Semiannual Inflation Rate (inflation):

decimal

Years Held (y):

years

Current Value (V):

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1. What is the I Bond Savings Bond Calculator?

The I Bond Savings Bond 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 Bond value formula:

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

Where:

$ V $ — Current value (USD)
$ P $ — Purchase amount (USD)
$ fixed $ — Fixed annual rate (decimal)
$ inflation $ — Semiannual inflation rate (decimal)
$ y $ — Years held (years)

Explanation: The formula accounts for the combined effect of the fixed rate and inflation rate compounded semiannually over the holding period.

3. Importance of I Bond Value Calculation

Details: Calculating I Bond values helps investors understand the growth of their savings bond investments, track inflation-protected returns, and make informed decisions about holding or redeeming bonds.

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 amounts and rates).

5. Frequently Asked Questions (FAQ)

Q1: What are I Bonds?
A: I Bonds are U.S. Treasury savings bonds that offer inflation protection by combining a fixed rate with a semiannual inflation rate.

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 based on CPI-U changes.

Q3: What is the minimum holding period for I Bonds?
A: I Bonds must be held for at least one year, and redeeming within five years results in a three-month interest penalty.

Q4: Are I Bonds taxable?
A: I Bond interest is subject to federal income tax but exempt from state and local income taxes. Tax can be deferred until redemption.

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