1. What is I Bond Value Calculation?

I Bond Value Calculation determines the current worth of Series I savings bonds based on purchase amount, fixed rate, semiannual inflation rate, and holding period. I Bonds are U.S. Treasury savings bonds that protect against inflation.

2. How Does the Calculator Work?

The calculator uses the I Bond 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 combines fixed and inflation components with semiannual compounding to calculate the bond's current value.

3. Importance of I Bond Valuation

Details: Accurate I Bond valuation helps investors track investment performance, plan financial goals, and make informed decisions about holding or redeeming bonds.

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 I Bonds?
A: I Bonds are U.S. savings bonds that earn interest based on a combination of fixed rate and inflation rate, providing inflation protection.

Q2: How often do inflation rates change?
A: Inflation rates for I Bonds are adjusted semiannually in May and November based on CPI-U data.

Q3: What is the minimum holding period?
A: I Bonds must be held for at least 1 year, with penalties for redemption within first 5 years.

Q4: Are there purchase limits?
A: Yes, annual purchase limits apply per Social Security number ($10,000 electronic, $5,000 paper via tax refund).

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